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Gensler staffs up at SEC — Gary Gensler’s team at the Securities and Exchange Commission is starting to take shape, MM has learned.
Kevin Burris, the oversight and investigations director for House Financial Services Chair Maxine Waters, is leaving the Hill to join the agency, sources say. He’s expected to lead legislative affairs — a critical supporting role for Gensler.
Lisa Peto, the Financial Services Committee’s former chief counsel, says Burris is well regarded on both sides of the aisle in the House and Senate. “I expect Kevin to serve as a steady hand to Gensler while amplifying progressive priorities,” says Peto, now a principal at Mindset.
Biden preps sweeping climate finance plan — President Joe Biden is preparing to instruct federal agencies to take comprehensive action to combat climate-related financial risks to the government and the economy, in part through new regulations, POLITICO’s Lorraine Woellert reports exclusively.
The details are in a draft executive order that the administration is prepping ahead of Biden’s global climate summit next week. Finance is expected to be a major focus.
AOC’s new push for postal banking — Rep. Alexandria Ocasio-Cortez is joining forces with Sens. Kirsten Gillibrand and Bernie Sanders to try to convince Democrats to enact a $6 million pilot program for the postal service to expand in financial services. They may face resistance from moderates such as Sen. Jon Tester of Montana, who said this week he isn’t inclined to support postal banking proposals and doesn’t expect them to get traction. Banks are prepared to fight back hard.
Happy Friday — Have a wonderful weekend. Ben will be back Monday. So please send tips and praise for your guest hosts to [email protected] and [email protected].
Driving the day — Brookings holds an event on NFTs at noon … CFTC Commissioner Dawn Stump talks about the regulation of Bitcoin at a Texas A&M conference at 4:30 p.m. …
Tech stocks lead S&P, Dow to record highs — Reuters’ Shivani Kumaresan and Shreyashi Sanyal: “The S&P 500 and the Dow hit record highs on Thursday as easing inflation concerns boosted demand for richly valued technology stocks, while upbeat earnings reports and strong March retail sales raised hopes of a broader economic rebound.”
Brown, Waters call up big bank CEOs for May hearings — The CEOs of the six largest U.S. banks will testify before Senate and House committees in back-to-back hearings late next month, lawmakers announced Thursday.
Senate Banking Chair Sherrod Brown (D-Ohio) and House Financial Services Chair Maxine Waters (D-Calif.) formally announced the virtual hearings — first reported by POLITICO — as they seek to escalate oversight of Wall Street.
Democrats agonize over Republican role in Biden infrastructure plan — POLITICO’s Marianne LeVine, Burgess Everett and Sarah Ferris: “Democrats are clearly at a crossroads on the critical decision of whether or not to work with their GOP colleagues. And the clock is ticking.
“During private conversations with members of both parties in recent days, White House Chief of Staff Ron Klain has signaled that there’s still time to wait for Republican buy-in, but that the party shouldn’t take forever, according to several people familiar with the discussions.”
Biden targets Russian debt — NYT’s Peter S. Goodman, Jack Ewing and Matt Phillips: “The Biden administration on Thursday barred American banks from purchasing newly issued Russian government debt, signaling the deployment of a key weapon in Washington’s intensifying conflict with Moscow — threatening Russia’s access to international finance. …
“[A]s a symbolic step, experts said, the measures outlined by the Biden administration signal its willingness to engage in an incremental approach that could lead to harsher measures, such as imposing tougher curbs on Russia’s access to capital markets, if Moscow does not moderate its activities.”
Massachusetts wants to revoke Robinhood’s license — WSJ’s Caitlin McCabe: “Massachusetts securities regulators on Thursday asked that Robinhood Market Inc.’s registration as a broker-dealer in the state be revoked to prevent the popular online brokerage from doing business there.
“The regulators said Robinhood has ‘continued a pattern of aggressively inducing and enticing trading among its customers,’ in a follow-up filing to a complaint filed by the state against the company in December.”
BofA, Citi see earnings bump — NYT’s Kate Kelly and Stacy Cowley: “Profit at both Bank of America and Citigroup jumped for the first three months of this year, bouncing back from the lows of the early stages of the pandemic in 2020, as they reduced their loss cushions to reflect an improving economy. …
“Like JPMorgan Chase and Wells Fargo, which reported first-quarter results on Wednesday, both banks were aided by the release of the cash cushions they had set aside during the economic downturn last year to absorb potential losses.”
And Citi pulls back in Asia — FT’s Imani Moise: “Citigroup on Thursday put its consumer operations in 13 markets across Asia and eastern Europe up for sale, appeasing investors who have pressed the bank to boost profitability by cutting costs in its underperforming retail network.”
First in MM: Kennedy presses Brown for flood insurance hearing — Sen. John Kennedy is calling on Senate Banking Chair Sherrod Brown to invite a top FEMA official, David Maurstad, to testify on a historic revamp of the National Flood Insurance Program that will affect insurance rates for millions of Americans. “I have serious concerns about Louisiana families being able to afford flood insurance under the proposed Risk Rating 2.0,” Kennedy, a Republican, told Brown in a letter.
Fed study: Black, Hisapanic firms half as likely to get needed financing — Reuters: “The coronavirus pandemic exacerbated the challenges faced by minority-owned businesses, which experienced higher rates of closures and revenue losses and had more trouble accessing credit than white business owners, according to a report by the 12 regional banks of the Federal Reserve.
“Businesses owned by people of color were more likely to scale back their operations during the pandemic, according to the study released on Thursday. Black-owned businesses, in particular, struggled to access financing and were more prone to using personal savings or to borrow money from family and friends to stay afloat.”
BlackRock, Citi in legal fight over Texas storm — Bloomberg’s Christian Berthelsen: “A Texas wind farm owned by BlackRock Inc. is locked in a $100 million court battle with Citigroup Inc. over losses caused by the devastating winter storms in Texas.
“The BlackRock unit, Mariah Del Norte, sells power to Citigroup under a 2016 agreement, but was unable to generate power during the February storm. Citigroup has declared the event a default and sought to bill the unit $100 million for undelivered power, which Mariah says is more than the wind project’s total revenue from 2017 to 2020.”
Layoffs are down and spending is up — AP’s Christopher Rugaber and Joseph Pisani: “A much-awaited economic boom coming off the pandemic recession appeared to edge closer to reality Thursday with fresh data showing the pace of layoffs dwindling, consumers spending freely and manufacturing rebounding.
“The latest barometers point to a U.S. economy that’s steadily regaining its health as vaccinations accelerate, business curbs are lifted in many states and more people are willing to travel, shop, eat out and otherwise resume their spending habits. Though many Americans who have lost jobs or income are still suffering, hopes are rising that the benefits of the recovery will spread further in the coming months to groups of people who have yet to benefit.”
And you know what else is down? Borrowing. — WSJ’s Telis Demos: “The good news for banks is that consumers are flush with cash and less likely to fall behind on their debts. But this also means it will be that much longer before they need to borrow more.
“Banks really need loan growth to offset the effect of low interest rates and the drag of huge deposit inflows sitting in cash on their balance sheets. Many banks’ credit-card portfolios plunged during 2020 as consumers spent less and also paid down debt. In theory, the economic growth that is anticipated for this year would imply a greater use of credit by consumers and businesses to fund more activities.”
POGO PPP review finds $445 million tied to criminal cases — The Project on Government Oversight is out with a new report reviewing the impact of fraud on the nearly $1 trillion Paycheck Protection Program over the past year. The group’s tally of criminal cases announced so far found that the accused sought $445 million, with $246 million getting into the hands of alleged fraudsters.
