Warren Interviews AGs for Consumer Protection Agency

Reports this week indicate that Elizabeth Warren, who is interim head of the U.S. Consumer Financial Protection Bureau, has interviewed four Democratic state attorneys general to be her permanent successor. The four AGs reportedly in the running are Tom Miller of Iowa, Lisa Madigan of Illinois, Roy Cooper of North Carolina and Martha Coakley of Massachusetts. The bureau is scheduled to officially start work on July 21. Under the Dodd-Frank Wall Street Reform Act, which President Obama signed in July, the bureau must have a Senate-confirmed director to perform certain functions such as the supervision and regulation of non-bank financial firms.

House Republicans Release Top Line Budget Numbers

With President Obama set to release his FY 2012 budget on February 14, House Republican leaders on Thursday announced they would seek $32 billion in spending cuts from the resolution currently funding the government. Republicans framed their proposal as cutting $74 billion from President Obama’s 2011 budget request.  However, because Obama’s budget was never approved by the last Congress, the cuts would actually be made against a continuing resolution now funding the government. That resolution is to expire on March 4, and if lawmakers do not agree on another short-term measure or one funding the government for the rest of the year, they risk a government shutdown. The spending ceiling announced by House Budget Committee Chairman Paul Ryan (R-WI) represents a $58 billion cut in non-security discretionary funding. While details of the specific department cuts were not announced on Thursday, the House Appropriations Committee next week will release its bill detailing the specific department budgets based on the spending ceiling. Reports indicate that the Democratic majority in the Senate is opposed to the House Republican budget cuts.

TARP Program Breaks Even with Fifth Third Bank Repayment

On Thursday, the Treasury Department announced that Fifth Third Bank has now fully repaid its $3.4 billion in TARP loans and that total repayments and other income from programs within TARP (approximately $243 billion) have nearly surpassed total disbursements under those programs (approximately $245 billion). The Treasury Department also announced that current estimates indicate that bank programs within TARP will ultimately provide a profit of nearly $20 billion to taxpayers.

House Financial Services Committee Releases Draft Oversight Plan

On Wednesday, the House Financial Services Committee Chairman Spencer Bachus (R-AL) circulated to Committee members his oversight plan for the 112th Congress. Bachus’s draft plan indicates that the panel will focus on overseeing implementation of the Dodd-Frank Wall Street Reform Act and that his major concerns with bill are the Volcker rule limiting proprietary trading by banks, margin and capital requirements on derivatives, the Financial Stability Oversight Council responsible for identifying firms that are “systemically significant,” the Consumer Financial Protection Bureau, and Fannie Mae and Freddie Mac. Bachus has scheduled a committee meeting on February 10 to consider the draft proposal. House committees are required to adopt oversight plans and submit them to the House Oversight and House Administration Committees by February 15.

New Derivatives Rules Proposed by SEC

On Wednesday, the Securities and Exchange Commission (SEC) proposed new rules that would require derivatives to be traded on swap execution facilities or on regulated exchanges which was mandated in the Dodd-Frank Wall Street Reform Act. The five commissioners unanimously agreed to propose the new rules for execution facilities which are now open for comment during a 60-day period, after which the agency must vote on a final version of the rules. The SEC’s proposed rules are similar to proposed rules issued recently by the Commodity Futures Trading Commission (CFTC). The Dodd-Frank bill requires both agencies to complete their derivatives rules by July 2011.

More Information

If you have any questions regarding any of these issues, please contact:

Matt Jessee, Policy Advisor
matt.jessee@bryancave.com
1 314 259 2463