September 20, 2019 

We extend our deepest sympathies to Rep. James Clyburn (D-SC) and, indeed, to the people of South Carolina on the death of Dr. Emily Clyburn, librarian, philanthropist, and civil rights activist. Ms. Emily, as she was known, was a public school librarian before spending 29 years as a medical librarian at Charleston Naval Base and Dorn VA Medical Center. Emily England and Jim Clyburn were students at South Carolina State University when they met in jail, imprisoned for civil rights activism on campus. A pedestrian bridge at SCSU bears her name, and the Clyburns’ contributions made it possible for SCSU to reestablish its Honors College. She leaves behind her husband, three daughters, four grandchildren, and a lasting legacy. 

Scalia applauds SEC Best Interest rule, but says Labor will not cede ERISA authority
Eugene Scalia, nominated to serve as Secretary of Labor, told the Senate Committee on Health, Education, Labor & Pensions yesterday that he had been glad to see the Securities and Exchange Commission address the responsibilities of investment advisers and broker-dealers through Regulation Best Interest, but he is mindful of the Department of Labor’s “special role” in protecting employee retirement savings. Federal ethics rules will govern his own role in the Department of Labor’s consideration of revisions to its own fiduciary rule, Scalia said; he will seek guidance on the question, but did not offer to preemptively recuse himself. He pointed to actions he had taken as the Department of Labor’s Solicitor to protect workers’ pension plans in the early 2000s, and he said that DOL under his leadership would not cede its authority under the Employment Retirement Income Security Act (ERISA) to the SEC. He also said that “something needs to be done” about impending crises in pension funds such as Central States, which threaten not only millions of retirees but the integrity of the Pension Benefit Guarantee Corporation. The HELP Committee is scheduled to vote on Scalia’s nomination next Tuesday. 

Senate oversight hearing questions federal antitrust structure
Appearing before a Senate Judiciary Subcommittee on Tuesday, the Chairman of the Federal Trade Commission and the Assistant Attorney General for the Justice Department’s Antitrust Division both said they thought it would be worthwhile for Congress to re-evaluate the agencies’ parallel, overlapping and sometimes duplicative enforcement authority over anticompetitive practices. Senator Mike Lee (R-UT), Chairman of the Subcommittee on Antitrust, Competition Policy, and Consumer Rights, voiced concern about the FTC and Justice conducting parallel or duplicative investigations of monopolistic activity at the same tech firms. While FTC Chairman Joseph Simons and AAG Makan Delrahim said duplication and conflicts were minimal, both admitted that the system for dividing responsibilities between agencies had broken down in places, and the current enforcement structure was “not the best model of efficiency.” Senator Amy Klobuchar (D-MN), the Subcommittee’s ranking member, said she’d “rather have a split investigation than no investigation.” 

FDIC finalizes simplified capital rules for community banks
At its board meeting on Tuesday, the Federal Deposit Insurance Corporation finalized a rule to implement a new community bank leverage ratio framework, as required by last year’s Economic Growth, Regulatory Relief and Consumer Protection Act. Community banks qualify for this framework if they have a Tier 1 leverage ratio of at least 9 percent; less than $10 billion in consolidated assets; and limited off-balance sheet exposure. Banks can begin to use the new framework with the March 1, 2020 call report.

CFPB’s Consumer Complaint Database will remain public, with changes
The Consumer Financial Protection Bureau (CFPB) announced Wednesday that it will continue to publish consumer complaints, but “with enhanced data and context that will benefit consumers and users.” The Consumer Complaint Database will include all previously published data fields, including consumers’ own descriptions of their complaints, but will more prominently display disclosures that make it clear these complaints are not a statistical sample, and will display messages that let consumers know they can communicate directly with financial institutions to address their concerns, and can get answers to frequently asked questions before they submit a complaint. The CFPB will explore expanding companies’ ability to respond in public to complaints listed in the database, and look for ways to put complaints in context with other data.

CFPB seeks legislation to resolve “constitutional defect” of Director’s position
This week the Consumer Financial Protection Bureau joined the Department of Justice’s brief in Seilia Law LLC v. CFPB, taking a position against itself in a petition for Supreme Court review. The lawsuit challenges as unconstitutional a provision in Dodd-Frank that would allow the President to fire the CFPB Director only for cause. CFPB Director Kathy Kraninger wrote to Speaker of the House Nancy Pelosi (D-CA) and House Majority Leader Mitch McConnell (R-KY) asking them to take legislative action to correct this “constitutional defect.” She said the CFPB would no longer defend its enabling statute, but would argue that the provision violates Constitutional separation of powers. Supreme Court Justice Brett Kavanaugh, in his position as Judge on the US Court of Appeals for the D.C. Circuit, first found the Director’s status unconstitutional in his ruling on PHH Corp. vs. CFPB in 2017. An en banc ruling later overturned that decision. 

CFPB, FTC announce public workshop on accuracy of credit and background reports
The CFPB and Federal Trade Commission (FTC) will host a public workshop on December 10 to explore issues affecting the accuracy of consumer credit reports and background screenings. Industry representatives, consumer advocates, and regulators will discuss methods for improving accuracy, appropriate strategies for dispute resolution, the effects of removing information about medical debt on credit reports, the opportunities and challenges presented by new technology and more. Those wishing to participate as a presenter or panelist should email requests to AccuracyWorkshop@ftc.gov; the public can submit comments here.

Confirmations, Nominations, Departures

• Rep. Paul Cook (R-CA) announced that he will not run for reelection to the US House of Representatives, but will seek a position on San Bernardino County’s Board of Supervisors instead. Cook was first elected to Congress in 2012.
  
  
• The Senate confirmed the nominations of Brent McIntosh to serve as Undersecretary of the Treasury for International Affairs and Brian Callanan to serve as General Counsel of the Treasury. 
  

Next Week in Washington

• September 24 at 10:00 a.m. House Committee on Financial Services holds a hearing on “Oversight of the Securities and Exchange Commission: Wall Street’s Cop on the Beat.”
  
  
• September 24 at 10:00 a.m. House Appropriations Subcommittee on Financial Services and General Government holds a hearing on “IRS Oversight: Treasury Inspector General for Tax Administration.”
  
  
• September 24 at 10:00 a.m. House Science Subcommittee on Investigations and Oversight holds a hearing on “Online Imposters and Disinformation.”
  
  
• September 24 at 10:00 a.m. Senate Committee on Health, Education, Labor, and Pensions meets to vote on the nomination of Eugene Scalia to be Secretary of Labor.
  
  
• September 24 at 2:00 p.m. House Science Subcommittee on Research and Technology holds a hearing on “Artificial Intelligence and the Future of Work.”
  
  
• September 24 at 2:00 p.m. House Financial Services Subcommittee on Diversity and Inclusion holds a hearing on “Examining the Racial and Gender Wealth Gap in America.”
  
  
• September 25 at 2:00 p.m. Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights holds a hearing on “Competition in Digital Technology Markets: Examining acquisitions of nascent or potential competitors by digital platforms.”
  
  
• September 25 at 10:00 a.m. House Financial Services Subcommittee on Consumer Protection and Financial Institutions holds a hearing on “Promoting Financial Stability: Assessing Threats to the US System.”
  
  
• September 25 at 10:00 a.m. House Appropriations Subcommittee on Financial Services and General Government holds a hearing on “Federal Trade Commission: Protecting Consumers and Fostering Competition in the 21st Century.”
  
  
• September 25 at 10:00 a.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “Facilitating Faster Payments in the United States.”
  
  
• September 25 at 10:00 a.m. Securities and Exchange Commission holds an open meeting to consider new rules on Publication or Submission of Quotations without Specified Information; Solicitations of Interest Prior to a Registered Public Offering; and Exchange-Traded Funds.
  
  
• September 25 at 2:00 p.m. House Financial Services Subcommittee on Housing, Community Development, and Insurance holds a hearing on “Protecting Seniors: A Review of the FHA’s Home Equity Conversion Mortgage (HECM) Program.”
  
  
• September 26 at 10:00 a.m. House Financial Services Committee holds a hearing on “Examining Legislation to Protect Consumers and Small Business Owners from Abusive Debt Collection Practices.”
  
  
• September 26 at 2:00 p.m. House Financial Services Task Force on Financial Technology holds a hearing on “The Future of Real-Time Payments.” 
  

The Ellis Insight