Lawmakers seek SEC rule clarification

Sens. Elizabeth Warren (D-MA), Cory Booker (D-NJ), and Sherrod Brown (D-OH) recently forwarded correspondence to the Financial Industry Regulatory Authority (FINRA) as means of gaining clarity regarding a Security and Exchange Commission (SEC) standards of conduct rule. The senators sent a letter to the FINRA President and Chief Executive Officer Robert W. Cook requesting the […]

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Sens. Elizabeth Warren (D-MA), Cory Booker (D-NJ), and Sherrod Brown (D-OH) recently forwarded correspondence to the Financial Industry Regulatory Authority (FINRA) as means of gaining clarity regarding a Security and Exchange Commission (SEC) standards of conduct rule.

The senators sent a letter to the FINRA President and Chief Executive Officer Robert W. Cook requesting the organization provide its interpretation of the SEC’s proposed standards of conduct rule.

The lawmakers said they are concerned the rule, which FINRA will play a significant role in implementing and enforcing, would not adequately protect investors or guarantee brokers put their clients’ interests ahead of their own.

“Despite its title implying a much more stringent standard, this proposal is unlikely, for several reasons, to give investors the peace of mind they deserve that the advice they are receiving is truly in their best interests,” the senators wrote. “In other words, billions of dollars in middle-class Americans’ hard-earned savings-which families need to buy a house, send a child to college, or retire in old age may depend on how you understand and implement the SEC’s rule.”

The lawmakers said the correspondence was generated in the wake of a statement issued by Warren in April expressing concern the proposal would do little to eliminate conflicts of interest and protect working families from conflicted investment advice.

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Bill targets IRS administrative reform

Sens. Orrin Hatch (R-UT) and Ron Wyden (D-OR) introduced last week a measure designed to reform certain administrative practices at the Internal Revenue Service (IRS).© Shutterstock The legislation is based on two 114th Congress bills that unanimously passed the Finance Committee in 2016. The senators said it seeks to assist the agency by increasing taxpayer […]

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Sens. Orrin Hatch (R-UT) and Ron Wyden (D-OR) introduced last week a measure designed to reform certain administrative practices at the Internal Revenue Service (IRS).

© Shutterstock

The legislation is based on two 114th Congress bills that unanimously passed the Finance Committee in 2016. The senators said it seeks to assist the agency by increasing taxpayer protections and electronic filing; enhancing whistleblower protections; reforming policies concerning IRS employees; increasing scrutiny of IRS audit criteria; and supporting prevention of identity theft and tax refund fraud.

“Ensuring the IRS has greater flexibility and bringing it into the 21st century continues to be a top priority, especially with the largest rewrite of the tax code in more than three decades on the books,” Hatch, who serves as chairman of the Finance Committee, said. “We’ve been working hand in glove with the administration to ensure a proper and seamless implementation of new policies and are confident this bill will streamline the agency in a way that protects taxpayers from fraud and abuse, increases electronic filing and supports IRS employees.”

Wyden said there the nation is continually seeing incidents involving the theft of taxpayer dollars and personal data, noting more safety measures are needed.

“Congress must do more to protect American taxpayers from fraud and financial abuse,” Wyden, ranking member of the Finance Committee, said. “This bipartisan legislation will make common-sense changes to help taxpayers and streamline administrative rules at the IRS, which will allow tax officials and agents to better safeguard the American people against financial predators.”

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Watkins to lead new CFPB division

Paul Watkins has been chosen to lead the Consumer Financial Protection Bureau’s (CFPB) new Office of Innovation.© Shutterstock Bureau Acting Director Mick Mulvaney recently announced the decision, citing Watkin’s expertise, track record of protecting consumers, and commitment to innovation to the Bureau. “I am confident that, under his leadership, the Office of Innovation will make […]

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Paul Watkins has been chosen to lead the Consumer Financial Protection Bureau’s (CFPB) new Office of Innovation.

© Shutterstock

Bureau Acting Director Mick Mulvaney recently announced the decision, citing Watkin’s expertise, track record of protecting consumers, and commitment to innovation to the Bureau.

“I am confident that, under his leadership, the Office of Innovation will make significant progress in creating an environment where companies can advance new products and services without being unduly restricted by red tape that belongs in the 20th century,” Mulvaney said.

Watkins joined the Bureau from the Arizona Office of the Attorney General, where he was in charge of the office’s fintech initiatives and managed the FinTech Regulatory Sandbox, the first state fintech sandbox in the country, which allowed
a company limited access to the marketplace in exchange for relaxing some regulations.

Watkins also served as the Chief Counsel for the Civil Litigation Division, where he managed the state’s litigation in areas such as consumer fraud, antitrust, and civil rights.

The Office of Innovation was created to focus on encouraging consumer-friendly innovation, with the intent of fulfilling its statutory mandate to promote competition, innovation, and consumer access within financial services.

The new office is expected to focus on creating policies to facilitate innovation, engaging with entrepreneurs and regulators and reviewing outdated or unnecessary regulations.

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Vice Chairman for Supervision Randal K. Quarles sworn in for second term as member of the Board of Governors of the Federal Reserve

Vice Chairman for Supervision Randal K. Quarles sworn in for second term as member of the Board of Governors of the Federal Reserve

Vice Chairman for Supervision Randal K. Quarles sworn in for second term as member of the Board of Governors of the Federal Reserve

Read more / Original news source: https://www.federalreserve.gov/newsevents/pressreleases/other20180723a.htm

NVCA lauds House advancement of JOBS Act

The National Venture Capital Association (NVCA) is lauding House advancement of the JOBS and Investor Confidence Act of 2018 by a vote of 406-4. © Shutterstock “The JOBS and Investor Confidence Act of 2018 is a broad-based approach to analyzing and improving the investment environment for startups,” Bobby Franklin, NVCA president and CEO, said. “This […]

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The National Venture Capital Association (NVCA) is lauding House advancement of the JOBS and Investor Confidence Act of 2018 by a vote of 406-4.

© Shutterstock

“The JOBS and Investor Confidence Act of 2018 is a broad-based approach to analyzing and improving the investment environment for startups,” Bobby Franklin, NVCA president and CEO, said. “This bill will focus policy conversations in Washington on complex but critical issues for growth companies considering going public, reduce the cost of being a smaller public company and improve the regulatory environment for startup investment. We applaud the leadership of the House Financial Services Committee for working to build this important package.”

NVCA officials said they were particularly pleased to see the inclusion of the Developing and Empowering our Aspiring Leaders (DEAL) Act, sponsored by Rep. Trey Hollingsworth (R-IN).

The legislation would encourage capital formation for startups by directing the Securities and Exchange Commission (SEC) to make a percentage of secondary investments qualifying for purposes of the definition of a venture capital fund, according to officials.

NVCA officials said modernizing the SEC’s definition of a VC fund to more accurately reflect the industry has become one of the most significant regulatory priorities facing the startup ecosystem.

Franklin said Hollingsworth’s leadership in advancing the DEAL Act is critical to the venture capital community.

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NAHB links housing starts decline to tariffs

National Association of Home Builders (NAHB) officials recently commented on new data released by the Department of Housing and Urban Development and the Commerce Department, linking the June decline in housing starts to the increased implementation of tariffs this year.© Shutterstock The data showed total housing starts fell 12.3 percent in June to a seasonally […]

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National Association of Home Builders (NAHB) officials recently commented on new data released by the Department of Housing and Urban Development and the Commerce Department, linking the June decline in housing starts to the increased implementation of tariffs this year.

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The data showed total housing starts fell 12.3 percent in June to a seasonally adjusted annual rate of 1.17 million units. Within the overall number, single-family starts fell 9.1 percent to 858,000 units. The multifamily sector, which includes apartment buildings and condos, dropped 19.8 percent to 315,000.

“We have been warning the administration for months that the ongoing increases in lumber prices stemming from both the tariffs and profiteering this year are having a strong impact on builders’ ability to meet growing consumer demand,” Randy Noel,
NAHB chairman and a custom home builder from LaPlace, Louisiana, said. “This is why we continue to urge senior officials to take leadership and resolve this issue.”

Combined single and multifamily housing starts fell in all regions of the country, per officials, noting starts fell 3 percent in the West, 9.1 percent in the South, 35.8 percent in the Midwest and 40 percent in the Northeast.

“The concern over material costs, especially lumber, is making it more difficult to build homes at competitive price points, particularly for newcomers entering the housing market,” Michael Neal, NAHB senior economist, said. “Moreover, the soft permit report does not suggest a significant increase in housing production in the near term. However, consumer demand for single-family housing continues to increase as the overall economy and labor market strengthens.”

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Rep. Hensarling urges Congress to pass flood insurance bill

Rep. Jeb Hensarling (R-TX) recently urged Congress to pass a bill that would extend the National Flood Insurance Program (NFIP) through Nov. 30, 2018.© Shutterstock While the House advanced the bipartisan legislation more than eight months ago, the NFIP is set to expire at the end of July without Congressional action. The NFIP Extension and […]

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Rep. Jeb Hensarling (R-TX) recently urged Congress to pass a bill that would extend the National Flood Insurance Program (NFIP) through Nov. 30, 2018.

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While the House advanced the bipartisan legislation more than eight months ago, the NFIP is set to expire at the end of July without Congressional action.

The NFIP Extension and Enhanced Consumer and Community Protections Act of 2018 (H.R. 6402), sponsored by Reps. Ed Royce (R-CA) and Earl Blumenauer (D-OR), also includes eight reforms that have all been passed by the House. The reforms include having at-risk communities develop and implement a local plan to reduce their flood risk. It would also make available an additional $60,000 in insurance coverage to help homeowners cover the cost of new mitigation measures. Further, it would allow policyholders to pay their bills in monthly installments.

“Flooding in the United States killed over 115 people last year, and more than 550 since the last time Congress enacted a long-term NFIP reform bill. Yet 38 of the last 41 short-term extensions of the NFIP have contained zero reforms whatsoever — something which has to change if we want to help keep people safe,” Hensarling, chairman of the Financial Services Committee, said regarding the reauthorization of NFIP.

Hensarling said that he believes the Royce-Blumenauer bill is the best option right now even though a long-term solution is still needed.

“The right thing to do here would have been for Congress to enact a long-term reauthorization bill with reforms before this deadline,” Hensarling said. “However, given where we are, I think that the [NFIP Extension and Enhanced Consumer and Community Protections Act] represents the best option right now to keep the NFIP open and adopt some commonsense reforms to help policyholders and at-risk communities while we continue to work on a long-term solution.”

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House subcommittee examines digital currencies

The House Monetary Policy and Trade Subcommittee recently studied the extent to which the government should consider cryptocurrencies as money and its impact on domestic and foreign economies. © Shutterstock “The subcommittee examined the potential impact of digital currency on the future of our financial system,” Subcommittee Chairman Andy Barr (R-KY) said. “From its viability […]

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The House Monetary Policy and Trade Subcommittee recently studied the extent to which the government should consider cryptocurrencies as money and its impact on domestic and foreign economies.

© Shutterstock

“The subcommittee examined the potential impact of digital currency on the future of our financial system,” Subcommittee Chairman Andy Barr (R-KY) said. “From its viability as an alternative to traditional currencies, to its potential adoption by central banks, to its possible impact on monetary policy, it is important Congress carefully study every aspect of this new technology.”

Barr said the subcommittee also evaluated the merits of any uses by central banks of cryptocurrencies to better understand the future of both digital currencies and physical cash.

Officials said they must examine the extent to which digital currencies should be considered as money and the potential domestic and global uses for digital currency while noting many central banks around the world are considering instituting some form of digital currency.

“There is no doubt that the digitalization of financial transactions, records, access to information, and communication will continue to increase, and that the electronic networks underlying the activity continue to grow more intense and omnipresent,” Alex J. Pollock, R Street Institute distinguished senior fellow, said. “But the fundamental nature of money, it seems to me, will not change. “It is clear that having a flat currency is far too precious and profitable for governments for them ever to go back to a government currency backed and convertible into actual assets, whether gold coins or otherwise.”

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