Banking/Financial Institutions

A top House Republican sought Thursday to tie a contentious corporate disclosure proposal before the Securities and Exchange Commission to the IRS scandal, suggesting both reflect an overtly politicized federal government.

Financial Services Committee chairman Jeb Hensarling said the IRS’ apparent targeting of conservative groups raises questions about how pervasive “tactics of harassment” have become within the Obama administration, saying the scandal is “right out of the Watergate playbook.”

The Texas Republican, during a budget hearing, warned new SEC chairman Mary Jo White that her agency could similarly be viewed as acting in a partisan manner if it pursues a rule requiring public firms to report their political spending to shareholders.

Hensarling said the proposal “is well known to be part of a partisan political agenda of labor union bosses.”

“Now the American people are horrified at those who would use the strong arm of government for partisan political advantage, but it remains to be seen whether this could ever happen at the SEC,” Hensarling said. Read more...

Regulators weaken rule, allowing banks to keep control over derivatives.

But the policy statement stopped short of threatening a veto should Congress approve the bill.

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Sen. Elizabeth Warren (D-Mass.) wants financial regulators to justify their policy of settling charges with Wall Street's bad actors out of court.

In a letter sent to the Securities and Exchange Commission, Federal Reserve and Justice Department, Warren demanded any analysis regulators have undertaken that justifies a policy of pursuing settlements where the parties involved do not have to admit to wrongdoing.

Warren argued that regulators who too readily settle could end up obtaining insufficient compensation for victims while doing little to deter similar actions in the future.

"I believe strongly that if a regulator reveals itself to be unwilling to take large financial institutions all the way to trial — either because it is too timid or because it lacks resources — the regulator has a lot less leverage in settlement negotiations," Warren wrote in the letter.

"If large financial institutions can break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law."

Congressional Republicans are ratcheting up pressure on the new head of the Securities and Exchange Commission (SEC) to finally implement the Jumpstart Our Business Startups (JOBS) Act.

In a letter sent Monday to SEC Chairman Mary Jo White, four high-ranking GOP lawmakers said it was high time for regulators to implement the legislation, aimed at making it easier for small companies to raise capital. During her confirmation hearing in March, White vowed that getting the law in place would be a top priority if approved by the Senate. Now on the job for a little more than a month, the members reminded her of her commitment.

"We were encouraged by the commitment that you demonstrated during your confirmation process to see that the Commission completes these important rulemakings and hope that you will take steps to do so expeditiously," they wrote.

The Obama administration is extending rules that allow the government to set the salaries and severance packages for executives at Fannie Mae and Freddie Mac.

Both chambers will dig into the farm bill this week as lawmakers look to strike a deal.

The Senate Agriculture Committee is set to mark up its version of the bill on Tuesday, while its House counterpart will follow suit on Wednesday. 

The biggest difference between the two bills is how they handle food stamps. The House would cut $23 billion from food stamp programs, while the Senate bill would trim just $4 billion.

Leaders in the House and Senate have both committed to floor action in the coming weeks. Farmers are currently operating under an extension of the 2008 farm bill.

Sen. Warren called the increasing amount of student debt a "quiet but growing crisis."

House Democrats splintered Tuesday as members could not agree on whether to back changes to the Dodd-Frank financial reform law.

Several pieces of legislation altering the derivatives portion of the Wall Street overhaul were ultimately approved by the House Financial Services Committee with a combination of GOP and Democratic support. But first, a small but vocal group of Democrats, including the ranking member of the panel, trained their fire on bills cosponsored by their colleagues.

Members were split on whether the bills would make sensible changes to the financial overhaul or open gaping loopholes at the behest of the financial industry. The intraparty dissent may be a sign that Democrats are becoming more resistant to changes to the law, not less, as several of the contentious measures were easily cleared by the panel in 2012.

Rep. Stephen Lynch (D-Mass.) called one bill co-sponsored by Rep. Gwen Moore (D-Wis.) "basically a wish-list of the financial industry."

"This is exactly what they want," he said. "We're taking accountability and throwing it out the window."

The White House said the legislation would "threaten the full faith and credit of the United States."