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Georgia Secretary of State’s Office Has An “Oops Moment” Over Personal Identifying Information

The Georgia Secretary of State posted a letter on its website on November 18, 2015 admitting that, on October 13, the office inadvertently released personal identifying information on registered voters in Georgia. While the letter does not actually spell out what information was released, a lawsuit filed in Fulton County Superior Court this week alleges that the information on the 6,184,281 Georgia voters includes:

  • voters full name
  • residential address or mailing address if that is different
  • race
  • gender
  • voter registration date
  • last date the person voted
  • their social security number
  • driver’s license number
  • date of birth.

The information had been provided on CDs to 12 groups, including political parties and journalists, in a release that normally would only include basic information, such as names, addresses, registration and the last time the person voted. Under normal circumstances, the Secretary of State makes such information available for $500 to interested individuals and entities.

The Secretary of State letter indicates that the office has retrieved all of the CDs that contained the information and has confirmed that none of the data was retained by or disseminated to any third parties. In a day and time when state and federal governments have aggressively pursued private companies for similar inadvertent disclosures, the Secretary of State may still face liability.

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Financial Services Update – September 23, 2011

House Passes Government Funding Bill, Shutdown Looms Again

The fiscal year Continuing Resolution (CR) that funds the government in lieu of Appropriations bills expires on September 30th. Therefore, Congress is required to pass another funding resolution by October 1st in order to prevent a government shutdown. The House passed its CR late Thursday night after cutting an additional $100M from the Department of Energy program that backed the Solyndra loan. The House bill contains $3.65B in disaster relief, which is partially offset by a $1.5B cut to a Department of Energy loan program for manufacturers of fuel-efficient cars. On Friday, the Senate voted to reject the House’s bill by a vote of 59 to 36 because Senate Democrat leaders are seeking greater disaster relief funding. The most likely outcome is for the House and Senate to pass a “clean” CR that funds the government until November 18 and postpones the debate over increasing disaster funding. While Congress is scheduled to be in recess next week, the House and Senate must reach an agreement on a funding resolution before recessing.

Former SEC General Counsel Testifies About Madoff Ties

On Thursday, David Becker, the former general counsel of the Securities and Exchange Commission (SEC), testified before two Congressional panels regarding a report released this week by the SEC’s inspector general that referred Becker’s actions to the Justice Department for an investigation of possible violations of conflict-of-interest laws. Prior to Becker’s appearance before the committees, SEC Chairman Mary Schapiro and SEC Inspector General David Kotz also testified about their knowledge of the Becker matter. While Becker testified that he told numerous SEC officials about his financial connection to Madoff accounts, Schapiro told the Committee that she did not inform the other four SEC commissioners because Becker was cleared by the SEC’s ethics office. It is unclear if the Justice Department’s investigation will lead to any charges against Becker, but the SEC is already adopting several changes based on the inspector general’s report, including redirecting the top ethics officer to report directly to the chairman of the commission, rather than the general counsel.

House Subcommittee Passes First Postal Reform Bill

On Wednesday, the House Government Reform Oversight Subcommittee passed legislation to overhaul the U.S. Postal Service (USPS). The bill, sponsored by Rep. Darrell Issa, R-Calif., Chairman of the House Oversight and Government Reform Committee, would allow USPS to drop a delivery day and adjust labor costs. However, Rep. Dennis Ross, R-Fla., who chairs the House Oversight Subcommittee responsible for postal issues, introduced and passed a substitute amendment to the bill that also would cut back door-to-door delivery and reduce the postal workforce starting with retirement-eligible employees before laying off other staff. The bill now heads to the full Committee for consideration.

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Financial Services Update – September 16, 2011

Geithner Meets with Eurozone Finance Ministers

On Friday, Treasury Secretary Timothy Geithner met with seventeen European finance ministers in Poland to discuss the eurozone’s debt crisis. Jean-Claude Juncker, president of the Eurogroup, announced the group decided to delay till October a decision on whether to pay out the next tranche of a multi-billion euro loan to Greece. The two-day meeting of Europe’s Economic and Financial Affairs (ECOFIN) Council — hosted by Polish Finance Minister Jacek Rostowski and the president of the National Bank of Poland — comes ahead of G20 and IMF meetings later this month. The European Central Bank, along with the Fed, the Bank of England, the Bank of Japan and the Swiss National Bank, also announced that three U.S. dollar auctions would be held between October and December.

Senate Committee Passes Increased Funding for SEC and CFTC

On Thursday, the Senate Appropriations Financial Services Subcommittee passed its FY 2012 funding bill giving banking and commodities regulators large budget increases to help them implement sweeping new financial regulations. The bill, which will now go to the full U.S. Senate for a vote, gives the Securities and Exchange Commission a fiscal 2012 budget of $1.407 billion, an increase of roughly 19 percent from its current fiscal 2011 budget of $1.185 billion and the Commodity Futures Trading Commission an estimated 19 percent increase in its funding, jumping from $202 million to $240 million for fiscal 2012. That bill would also split oversight of the nearly $600 trillion over-the-counter derivatives market between the two regulators and give the SEC greater authority to regulate hedge funds, credit-rating agencies and municipal advisers. However, the fate of the bill remains uncertain because House Republicans oppose many of the Dodd-Frank provisions which increase the need for expanded SEC and CFTC budgets. Earlier this year, the House Appropriations Financial Services Subcommittee passed a bill that would reduce the CFTC’s budget to $171.9 million but maintain the SEC’s funding at its FY 2011 level. With the end of the year approaching, House and Senate leaders are bracing themselves for another omnibus bill that combines all the unpassed appropriations bills into one major bill. The House and Senate will most likely fail to pass similar Financial Services Appropriations bills which will cause the bill to be wrapped into the omnibus thereby reducing the chance of large increases for the SEC or CFTC.

Fitzpayne Nominated for Treasury Legislative Affairs Chief

On Wednesday, the White House announced that President Obama intends to nominate Alastair Fitzpayne as the next assistant secretary of Treasury for legislative affairs. Fitzpayne has been Treasury’s deputy chief of staff since January 2009. He was a legislative assistant to former Sen. Evan Bayh (D-Ind.) from 2001 to 2006. From 2007 to 2009, he served as a senior policy adviser to Rep. Rahm Emanuel (D-Ill.).

House Republicans Introduce Disaster Funding Bill

On Wednesday, House Republican leaders introduced a stopgap spending bill to keep the government operating though mid-November and provide $3.65 billion in short-term federal assistance to replenish strained disaster reserves. The funding resolution would impose a 1.4 percent cut on most agencies and Cabinet departments, including Defense, to stay within 2012 spending caps set in August. FEMA and the Corps of Engineers would immediately benefit from a first installment of $1 billion in emergency funds to avoid any disruption in aid for these last weeks of the 2011 fiscal year ending September 30. The second $2.65 billion represents a down payment toward FEMA’s 2012 budget. With two weeks left in fiscal 2011, FEMA’s disaster reserve fund has dwindled to $377 million and the agency has been operating since late August on an “immediate needs” basis, forcing delays in longer-term recovery projects around the nation. Senate Democrats, who have been pursuing their own much larger $6.9 billion disaster aid package, said they did not support the current House approach, but left open the possibility of agreement if House Republicans consider more disaster aid. The House is schedule to vote on its bill next week.

FDIC Approves New Systematic Risk Rules

On Tuesday, the FDIC approved new sets of rules that the largest banks will have to follow in drafting plans in the event of their own collapse. The panel also approved contingency planning guidelines for insured banks. The new rules, which were authorized in the Dodd-Frank Act, are designed to eliminate the need for bailouts by giving the FDIC power to liquidate large firms whose failure could threaten the financial system. Banks with at least $50 billion in assets will have to file such plans, as will any firm designated as systemically important by the Financial Stability Oversight Council. The final rule changes the filing timeline from an April draft proposal released by the FDIC and Fed, moving toward a tiered phase-in based on the total of non-bank assets held by firms. Companies with more than $250 billion in non-bank assets are required to file the plans by July 1, 2012. Firms with non-bank assets between $100 billion and $250 billion would be required to file by July 1, 2013, and all other firms would be required to submit plans by December 2013. The agency also approved unanimously a separate rule dictating resolution plans for FDIC-insured banks with more than $50 billion in assets. The rule, which the agency began drafting before the completion of the Dodd-Frank Act, would apply to 37 banks and thrifts. Thirty four of those firms would be required to file resolution plans with the Fed because of the size of their parent company. The rule takes effect January 1, 2012, and would be subject to a 60-day public comment period.

 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

 

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Financial Services Update – September 2, 2011

August Job Report Shows No Growth

On Friday, the Department of Labor released the August jobs report showing no net new jobs for the month. The Department revised the July report to decrease to 85,000 the number of net new jobs reported as opposed to the original 117,000 figure. The unemployment rate remained unchanged from July at 9.1 percent with the total number of unemployed workers remaining 14 million.

Obama Rejects New EPA Air Rule

On Friday, President Obama directed the EPA to abandon its proposed new rules that would lower the nation’s air quality standards from 75 parts per billion (ppb) to between 60 ppb and 70 ppb. The current standard will now remain in place until a scheduled reconsideration of pollution limits in 2013.

DOJ Sues to Block AT&T/T-Mobile Merger

On Wednesday, Deputy Attorney General James Cole announced that the Justice Department was filing an antitrust lawsuit in U.S. District Court to block AT&T’s acquisition of T-Mobile because the Department believes the merger would result in “higher prices, fewer choices and lower quality products for their mobile wireless services.” Following Cole’s announcement, FCC Chairman Julius Genachowski also declared his opposition to the proposed merger.

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Financial Services Update – August 26, 2011

Bernanke Signals No New Fed Stimulus

On Friday, Federal Reserve Chairman Ben Bernanke offered an upbeat assessment of the domestic economy that offered little indication of any immediate monetary stimulus by the Fed. However, Bernanke did acknowledge that the nation faces significant challenges, including high unemployment and an unsustainable federal debt. Bernanke also offered an unusual critique of the government’s fiscal policy, criticizing the political battle over raising the debt-ceiling. While Bernanke failed to signal any future Fed action, he did say the issue of potential action would be discussed at the next meeting in late September.

Treasury Department Announces OFAC Settlement with JPMorgan Chase

On Thursday, the Treasury Department announced that JPMorgan Chase has agreed to pay $88.3 million as part of a settlement over a series of transactions involving Cuba, Iran and Sudan. The Treasury Department’s Office of Foreign Assets Control (OFAC) said in a news release that JPMorgan processed wire transfers totaling around $178.5 million for Cuban nationals in late 2005 and early 2006, violating United States embargo laws. The bank was also fined for a 2009 incident in which it made a $2.9 million loan to a bank that had ties to Iran’s government-owned shipping line, a violation of United States sanctions against Iran. The third violation occurred in 2010 and 2011, when the bank failed to give up documents about a wire transfer that referred to Khartoum, the capital of Sudan. According to the release, the agency gave JPMorgan a list of documents believed to be possessed by JPMorgan. In response, JPMorgan, which previously said it had no such documents, produced more than 20 of the items in question.

S&P President Resigns

On Tuesday, McGraw-Hill, parent company of Standard & Poor’s (S&P), announced that S&P President Deven Sharma will step down from his position by the end of the year and be replaced by Douglas Peterson, the chief operating officer at Citigroup. McGraw-Hill said Sharma’s decision was not influenced by the United States’ credit rating downgrade or an investigation by the Justice Department over S&P’s rating of its subprime securities. The company said the decision to replace Sharma took place over six months ago when the Board of Directors decided to split the company into four divisions due to increasing pressure from investors.

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Financial Services Update – August 5, 2011

Economy Adds 117,000 Jobs in July

On Friday, the Department of Labor announced that the United States economy added 117,000 jobs in July causing the unemployment rate to fall to 9.1 percent from 9.2 percent in June. The Labor Department also revised its estimate of job growth in June to 46,000 from the previously reported 18,000.

European and Asian Leaders Call for Global Economic Cooperation

On Friday, the leaders of Germany, France and Spain scheduled an emergency conference after China and Japan called for global policy cooperation in response to the selloff in international markets. On Thursday, the European Central Bank (ECB) reactivated its dormant bond-buying program in an attempt to halt the deepening sovereign debt crisis, but the ECB only purchased Portuguese and Irish debt. Japanese Finance Minister Yoshihiko Noda called on global policymakers to confront currency distortions, the debt crises and concerns about the U.S. economy. Chinese Foreign Minister Yang Jiechi also said U.S. debt risks were escalating and countries should step up cooperation on global economic risks.

Congress Passes and President Signs Debt Limit Deal Averting Default

On Monday, the House of Representatives approved a compromise deal to raise the debt limit by a vote of 269-161. The bill, which was brokered Sunday night in last-minute negotiations between the White House and congressional leaders, passed with the support of 174 Republicans and 95 Democrats. On Tuesday, the Senate passed the bill by a vote of 74 to 26, and President Obama signed the legislation into law. The compromise allows a debt ceiling increase by as much as $2.4 trillion in total, with an immediate increase of $400 billion. President Obama is permitted to request a $500 billion increase in the coming months, which Congress could vote to disallow by a veto proof two-thirds margin. The agreement calls for more than $900 billion over ten years in spending cuts from defense and non-defense related programs, agencies and day-to-day spending, however Medicare, Medicaid, and Social Security cuts are prohibited. A further increase of the debt ceiling between $1.2 trillion and $1.5 trillion would be available after the “Super Committee” of six Republicans and six Democrats identifies matching levels of additional spending cuts. The Committee must complete its work by November 23, and if the Committee passes by a simple majority vote a recommendation of cuts and/or tax increases matching the debt ceiling increase, Congress must hold an up or down vote on the Committee recommendations by December 23. The Committee could overhaul the tax code or find savings in Medicare or other entitlement programs, however Congress can not modify the Committee’s recommendation before voting. Should the committee deadlock or should Congress reject the Committee’s recommendations, automatic across the board spending cuts of at least $1.2 trillion would automatically go into effect. The agreement also requires that the House of Representatives and the Senate vote on a Balanced Budget Amendment to the Constitution. The deal also includes changes to Pell Grants and student loan programs. Pell Grants will receive a $17 billion increase for low-income college students, which will be financed by the elimination of subsidized student loans for most graduate students. The compromise does not include any immediate revenue additions or tax increases.

Temporary FAA Agreement Reached

On Thursday, Congressional leaders reached an agreement on a six week extension of funding for the Federal Aviation Administration (FAA), ending a stalemate over the agency’s reauthorization. It was uncertain after the bill’s passage if Congress would act to restore back pay to the furloughed FAA employees or other non-federal airport workers who have been laid off since July 23. Unless the House and Senate negotiators are able to reach an agreement on a new funding package within six weeks, they will again force the FAA to furlough employees.

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

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Financial Services Update – July 29, 2011

Q2 GDP Announced

On Friday, the Commerce Department released its report on the country’s gross domestic product for the second quarter showing that the GDP grew at an annual rate of 1.3 percent, after having grown at an annual rate of 0.4 percent in the first quarter — a number that itself was revised sharply down from earlier estimates of 1.9 percent.

Senate to Hold CFPB Nomination Hearing

On Thursday, the Senate Banking Committee held a hearing on the nomination of Richard Cordray to be the new Director of the Consumer Financial Protection Bureau. While the nomination can be sent to the floor, Senate Republicans have vowed to block Cordray’s nomination and any other nominees for the directorship because they insist that the agency be run by a Commission rather than a Director and have its funding determined by Congress.

Carper/Blunt Introduce Consumer Data Security Bill

On Thursday, Sens. Tom Carper (D-Dela.) and Roy Blunt (R-Mo.) introduced legislation titled “The Data Security Act of 2011” which would require entities such as financial establishments, retailers, and federal agencies to safeguard sensitive information, investigate security breaches and notify consumers when there is a substantial risk of identity theft or account fraud. These new requirements would apply to retailers who take credit card information, data brokers who compile private information and government agencies that possess nonpublic personal information.

Senate Nomination Hearings for New Bank Regulators

On Tuesday, the Senate Banking Committee held a hearing to consider the pending nominations for Martin Gruenberg to head the FDIC, Thomas Curry to be Comptroller, and Roy Woodall to be a member of the Financial Stability Oversight Council. Senator Richard Shelby, the Banking Committee’s top Republican, said after the hearing that he would support Gruenberg’s nomination but would need more to review Curry’s record before offering his support. The nominations will now be sent to the floor for full consideration by the Senate.

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

 

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Financial Services Update – July 22, 2011

Debt Limit Negotiations Continue

On Tuesday, the House passed its “Cut, Cap and Balance” legislation which would cut government spending now, cap it in the future and approve a constitutional amendment to balance the federal budget. On Friday, the Senate voted to table a motion to consider the measure. However, after another tense week of negotiations between the Senate Republicans, Senate Democrats, House Republicans, House Democrats, and the President Obama, the outline of a purported deal seemed to emerge late Thursday. Congressional Democrats reported that President Obama discussed with them a deal he had reached with Speaker John Boehner to raise the debt ceiling by $2.4 trillion, enough to get through the 2012 elections, with at least as much in immediate spending cuts and a promise of  “tax reform”  in 2012. On Friday, in response to the news of a “deal,” Speaker Boehner told the House Republican Conference there was “no deal,”  but that he will continue to negotiate with the White House over the weekend. The most important questions remaining are how many House Republicans will vote for a deal that does not include immediate tax increases but does include the promise of broader “tax reform” next year and how many House Democrats will vote for a deal with no tax increases.

Greece Gets Another Bailout

On Thursday, European finance ministers agreed to a new $157 billion financial aid package for Greece in exchange for forcing Greece’s bond holders to accept a bond exchange that gives them less than originally promised. The new plan for Greece will provide for the euro zone’s bailout fund and the International Monetary Fund to lend Greece $157 billion over the next three years at 3.5% interest. Private creditors who hold Greek debt that matures in the coming years will “voluntarily” turn in their bonds and accept new ones that mature far in the future.

The EU also agreed Thursday to an expansion of its bailout fund. That vehicle, once restricted to lending to countries near the brink of collapse, will now be able to buy euro-zone bonds on secondary markets to move prices and lend directly to countries even before they lose access to private funding and could even include lending to finance bank recapitalizations. The leaders also agreed to cut the once-lofty interest rates that the bailout fund charges and extend to as much as 30 years the maturities of the loans it provides. Ireland and Portugal, both currently receiving European aid, will get breaks on their interest rates to 3.5%. Ireland was paying around 6% on the EU portion of its euro 67.5 billion bailout.

Treasury Sells Off Remaining Stake of Chrysler

On Thursday, the Treasury Department sold its remaining stake in Chrysler losing a total of $1.3 billion. Italian automaker Fiat purchased the U.S. government’s remaining 6% stake in Chrysler for $560 million, formally concluding the $12.5-billion bailout.

Suit Against Goldman Dismissed

On Thursday, former Australian hedge fund Basis Yield Alpha’s legal challenge to Goldman Sachs’ infamous Timberwolf 2007-1 collateralized debt obligation was dismissed by Judge Barbara Jones of the U.S. District Court for the Southern District of New York. Jones cited a Supreme Court decision that held that U.S. securities-fraud laws apply only to domestic transactions.

Senate Banking Hearing on One Year Anniversary of Dodd-Frank

On Thursday, in a hearing before the Senate Banking Committee, federal banking regulators testified on the implementation of the Dodd-Frank Wall Street Reform Act. Regulators said they are moving fast enough to give markets certainty, but slow enough to get hundreds of new rules right. A handful of regulatory agencies are writing hundreds of new rules to police the swaps market, reduce risk at the biggest financial firms, and bring the so-called shadow banking system — which includes hedge funds and non-traditional lenders — into the traditional regulatory framework. The SEC and CFTC have struggled to keep pace with the swift rule-writing timeline laid out in Dodd-Frank, and are months behind schedule on many key rules. However, in a surprising move, Federal Reserve Chairman Ben Bernanke said federal bank regulators may rethink their crackdown on derivatives if a global agreement cannot be reached on margin requirements thereby acknowledging that U.S. banks would be at a significant competitive disadvantage if their foreign rivals do not have to demand margin, or collateral, for derivatives trades.

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

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Financial Services Update – July 15, 2011

Debt Limit Negotiations Continue

After a week of tense negotiations between President Obama and Congressional leaders over the debt-limit increase, lawmakers now have less than three weeks to reach a deal before August 2, when the Obama administration says the U.S. could risk defaulting on its loans without an increase in the $14.3 trillion debt ceiling. All parties involved say that a significant deficit reduction plan should be part of the plan to raise the debt ceiling, but Democrats want to balance the budget by raising tax revenues in addition to making spending cuts — and the GOP remains firmly opposed to any tax increases.  However, Senate Republican Leader Mitch McConnell (R-KY) and Senate Majority Leader Harry Reid (D-NV) have proposed a contingency plan that would give President Obama authority to raise the debt ceiling by $2.5 trillion through the end of 2012 but require the President to submit spending cuts totaling $2.5 trillion to Congress in three tranches every four months. The McConnell-Reid plan would not come with tax increases or Medicare savings but does include an extension of unemployment insurance that would be offset by spending cuts.

Next week, the House will vote on the Republican “cut, cap and balance” proposal which would make raising the debt ceiling contingent on Congress sending a balanced budget amendment to the states. It would also limit government spending to under 20 percent of Gross Domestic Product over the next 10 years. While the legislation is expected to overwhelmingly pass the House, it is unlikely to become law because Senate Democratic leaders have said they will not vote on the legislation.

White House Likely To Submit South Korea Trade Bill Soon

On Friday, White House Chief of Staff William Daley said the Obama administration may send Congress a bill for a South Korea free-trade agreement that includes Trade Adjustment Assistance “very soon.”   The Senate Finance Committee passed a symbolic draft of the South Korea trade legislation that includes Trade Adjustment Assistance last week. However, the House Ways and Means Committee passed a South Korea bill without the aid attached. The hearings were “mock markups” that let lawmakers give the President their views on the free-trade deals before he submits them formally under fast-track rules that prohibit amendments and provide for a yes-or-no vote.

IRS Issues Delay on Offshore Bank Reporting Rules

On Thursday, the Internal Revenue Service issued a notice of delay in rulemaking for regulations stemming from the Foreign Account Tax Compliance Act which Congress adopted last year. The notice did not address many of the Act’s central policy questions, including the requirement to withhold 30 percent from payments that might have indirectly originated in the U.S. The new timeline gives offshore banks until June 30, 2013, to enter into an agreement with the IRS that would shield them from some withholding requirements. Institutions will not have to report on their efforts to track down their U.S. clients until 2014. Banks will not be required to make 30 percent withholdings on non-compliant U.S. customers until Jan. 1, 2014. Other withholdings on gross proceeds and income that might be indirectly sourced to the U.S. will not start until Jan. 1, 2015. All of the requirements were initially slated to take effect at the beginning of 2013. In April, the IRS responded to initial concerns with guidance that said the agency will focus on citizens with more than $500,000 in offshore bank accounts and those with private banking relationships at overseas institutions.

Bernanke Delivers Monetary Policy Report to Congress

On Wednesday and Thursday, Federal Reserve Chairman Ben Bernanke delivered the Fed’s semiannual Monetary Policy Report to the House Financial Services Committee and the Senate Banking Committee, respectively. Bernanke said the nation faces at least two crises, the fiscal budgetary crisis that Congress is trying to tackle and the unemployment crisis. He said the Federal Reserve’s planned purchase of $600 billion in longer-term Treasury securities that ended in June had the “intended effects of reducing the risk of deflation and shoring up economic activity” by decreasing longer-term Treasury yields and interest rates. Bernanke also addressed questions from Members regarding the troubled housing market and the “continuing weakness” of the labor market. According to Bernanke, almost half of those unemployed have been out of work for more than six months, the highest ratio in the post-World War II period.

 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

 

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Financial Services Update – July 8, 2011

US Adds 18,000 Jobs in June

On Friday, the Department of Labor announced that the U.S. economy added only 18,000 jobs in the month of June, edging the national unemployment rate up for the third straight month to 9.2 percent. June’s report of 18,000 new jobs is the lowest number in nine months and far below economists’ expectations of an increase of 90,000 new jobs.

Debt Limit Talks Continue into the Weekend

On Friday, a week after Vice President Biden’s debt limit negotiations halted, the White House announced that President Obama and congressional leaders would reconvene Sunday to try to finalize a deal. On Thursday, President Obama announced that he and Speaker Boehner had discussed a $4 trillion 10-year deficit reduction package that demands spending cuts and tax increases. Under this possible deal, Republicans would agree to extend the Bush-era tax cuts only for those making less than $250,000 annually, and Democrats would agree to a rewrite of the tax code that would eliminate dozens of tax breaks to lower marginal income tax rates. However, Speaker Boehner reiterated in his Friday press conference that no deal is imminent, and he believes both sides have much left to negotiate in order to agree to a deal before the August 2nd deadline.

Trade Agreements Delayed

This week during House and Senate committee hearings on the South Korea, Colombia and Panama free trade agreements, Republicans and Democrats continued to spar over unemployed workers’ retraining funding linked to the agreements. While the Congressional Budget Office has yet to provide a cost estimate for extending the retraining program, the funding is expected to be $1 billion over the course of the three-year extension. The White House’s position continues to be that approval of the trade pacts must include renewal of the retraining funding. On Thursday, House Ways and Means Chairman Dave Camp offered a compromise approach that would allow votes on the retraining programs on the same day as the trade agreements if the Administration submits them separately. While the House and Senate continue their negotiations, the final decision on how to move forward rests with the White House under fast-track authority granted when the pacts were originally negotiated.

House Republicans Push for Community Bank Capital Requirements

On Friday, the House Financial Services Committee held a hearing regarding the Federal Deposit Insurance Corporation’s demands on community banks to increase their levels of capital. The hearing focused on legislation recently introduced by Rep. Bill Posey (R-FL) that would require regulators to more narrowly focus on a whether a bank’s loans are being repaid on time and not whether others are making payments on behalf of the borrower. FDIC Deputy Director George French argued that the Posey bill would have banks and regulators disregard financial information indicating that the borrower lacks the ability to fully repay the principal and interest on the loan, even though the loan is current. French added that this would allow banks to add to their regulatory capital even though the expectation is that the loan will likely not be repaid. The bill is expected to be marked up by the Committee in the near future.

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

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



 

 

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