Overnight Finance: House sends Dodd-Frank rollbacks to Trump | What's in the bill | Trump says there is 'no deal' to help ZTE | Panel approves bill to toughen foreign investment reviews

Overnight Finance: House sends Dodd-Frank rollbacks to Trump | What's in the bill | Trump says there is 'no deal' to help ZTE | Panel approves bill to toughen foreign investment reviews
© Greg Nash

Happy Tuesday and welcome back to Overnight Finance, where we'd also like to take a look at the next SpaceX rocket. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.



Write us with tips, suggestions and news: slane@thehill.comvneedham@thehill.comnjagoda@thehill.com and nelis@thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill@NJagoda and @NivElis.


THE BIG DEAL: The House on Tuesday passed a bill to loosen federal regulations on the banking sector, securing an election-year legislative accomplishment that is likely to be touted by members of both parties.

The 258-159 House vote sends the bill to President TrumpDonald John TrumpFive takeaways from the Democratic debate As Buttigieg rises, Biden is still the target Leading Democrats largely pull punches at debate MORE, who has pledged to sign it.

The bill was opposed by only one Republican, Rep. Walter JonesWalter Beaman JonesRepublican Greg Murphy wins special election in NC's 3rd District Early voting extended in NC counties impacted by Dorian ahead of key House race The Hill's Campaign Report: North Carolina special election poses test for GOP ahead of 2020 MORE (R-N.C.), while 158 Democrats voted against it. Thirty-three Democrats broke ranks to loosen the Dodd-Frank Act of 2010, enacted by former President Obama and defended by his party for close to a decade.

"We've been losing a community bank or credit union every other day in America, and with it the hopes and dreams of millions," said Rep. Jeb HensarlingThomas (Jeb) Jeb HensarlingHouse passes Ex-Im Bank reboot bill opposed by White House, McConnell Has Congress lost the ability or the will to pass a unanimous bipartisan small business bill? Maxine Waters is the Wall Street sheriff the people deserve MORE (R-Texas), chairman of the House Financial Services Committee. "But today, that changes. Help is on the way."


I'll tell you what the bill does, doesn't do, and how it all came together right here.


Why it matters: The measure will exempt dozens of regional banks from tighter regulation by raising the threshold for closer Fed oversight from $50 billion to $250 billion in assets. That frees several major regional banks, including M&T, Citizens, SunTrust, BB&T, Fifth Third and BMO Financial Corp., from some of Dodd-Frank's strictest requirements.

Banks below the new $250 billion threshold will no longer be automatically subject to yearly Federal Reserve stress tests or higher capital requirements meant to ensure large firms are able to weather severe financial crises.

Those banks below the threshold will also be exempted from submitting a "living will" for Fed approval -- a plan that outlines how a bank's assets could be liquidated upon the firm's failure without causing a widespread meltdown.

For smaller firms, the bill exempts banks that extend 500 or fewer mortgages a year from reporting some home loan data to federal regulators under anti-discrimination laws. The bill also broadens the definition of qualified mortgages.

Other aspects of the legislation meant to bolster community banks and credit unions include loosening appraisal requirements for certain mortgage loans and exempting firms with less than $10 billion in assets from the Volcker Rule. Named after former Fed Chairman Paul Volcker, the rule bans banks from making risky trades with their own assets.



  • "By unraveling some of the suffocating regulatory burdens community banks face, they are better able to unleash their full economic potential." -- Independent Community Bankers of America president and CEO Rebeca Romero Rainey.
  • "Deregulating 26 of the largest 40 banks is dumb, unnecessary and poorly-timed." -- Better Markets president and CEO Dennis Kelleher.
  • "It was time to tackle one of the greatest challenges facing the credit union industry – unnecessary, burdensome regulations." -- National Association of Federally-Insured Credit Unions (NAFCU) president and CEO Dan Berger.
  • "It's hard to watch Congress ignore the painful lessons of the Great Recession." -- Mike Litt, consumer campaign director at U.S Public Interest Research Groups


What comes next: Trump will likely host a signing ceremony for the bill within the next few days, and a senior administration official told reporters Tuesday he's aiming to get it done before Memorial Day. The official didn't say if Trump would host Senate Democrats who supported the bill at the event, noting that invitations haven't been sent yet.

The House and Senate will also continue talks over the undetermined package of House bills that Senate GOP leaders have pledge to put up for a vote.

It's unclear which House bills will be taken up by the Senate, how they will appear on the floor and whether the measures have a chance of reaching Trump's desk.

The House bills from Hensarling aren't expected to pass the Senate on their own, but GOP leaders have privately floated attaching them to must-pass legislation.






Senators demand answers on Trump moves on ZTE: A bipartisan group of Senators Tuesday demanded answers from Treasury Secretary Steven MnuchinSteven Terner MnuchinHillicon Valley: Google to limit political ad targeting | Senators scrutinize self-driving car safety | Trump to 'look at' Apple tariff exemption | Progressive lawmakers call for surveillance reforms | House panel advances telecom bills Trump says he's 'looking at' Apple tariff exemption during tour of Texas plant Trump tax breaks for low-income neighborhoods draw scrutiny MORE on the Trump administration's moves to rescue Chinese telecoms firm ZTE.

"Given the clear findings ZTE is guilty of violating U.S. sanctions against Iran and North Korea, why is the administration backpedaling to make it easier for a Chinese company to operate and compete with U.S. companies?" Sen. Chris CoonsChristopher (Chris) Andrew CoonsHillicon Valley: Google to limit political ad targeting | Senators scrutinize self-driving car safety | Trump to 'look at' Apple tariff exemption | Progressive lawmakers call for surveillance reforms | House panel advances telecom bills Democrats raise privacy concerns over Amazon home security system Senators press Facebook over user location tracking policies MORE (D-Del.) demanded of Mnuchin in an appropriations subcommittee hearing.

ZTE was thrust into the political spotlight earlier this month when President Trump tweeted support for helping the Chinese firm continue to operate following steep sanctions imposed on the company by the U.S. Commerce Department.

The Commerce Department had imposed the sanctions and banned the company from buying U.S. components after the company admitted to breaking U.S. sanctions by selling equipment to North Korea and Iran. The agency also cited security concerns that the firm could help China to infiltrate U.S. networks.

"If the U.S. were ever to go to war with China, which I hope never ever occurs and never even comes into the realm of talking about this, it's not far-fetched to think that China could disable American cellphones or take control of American networks," Sen. Joe Manchin (D-W.Va) warned at Tuesday's hearing.

The Hill's Niv Elis takes us there.



Trump: 'There is no deal' to help ZTE: Trump said Tuesday that there is no deal to save ZTE, and that he is doing Chinese President Xi Jinping a favor by looking into how to breathe life back into the company that the Commerce Department has effectively shut down.

"President Xi and I have a great relationship, but there is no deal," Trump said at the White House. "We will see what happens. We are discussing deals. We're discussing various deals." 

Reuters reported Tuesday that the U.S. and China were closing in on a deal to lift a ban on U.S. companies selling components to ZTE. 

"As far as ZTE is concerned [Xi] asked me to look into it and I am doing that," Trump said during a meeting with South Korean President Moon Jae-in.  "And don't forget for the ones that say, 'Oh gee, maybe Trump is getting a little bit easy. ZTE, we closed it. It wasn't another administration, it was this administration that closed it."

Senate panel overwhelmingly approves amendment blocking Trump on ZTE: The Senate Banking Committee approved an amendment in an overwhelming and bipartisan 23-2 vote that would block Trump from easing sanctions on ZTE without first certifying to Congress that the company is complying with U.S. law.

The amendment, offered by Sen. Chris Van HollenChristopher (Chris) Van HollenHillicon Valley: Google to limit political ad targeting | Senators scrutinize self-driving car safety | Trump to 'look at' Apple tariff exemption | Progressive lawmakers call for surveillance reforms | House panel advances telecom bills Democrats raise privacy concerns over Amazon home security system Overnight Defense: Erdoğan gets earful from GOP senators | Amazon to challenge Pentagon cloud contract decision in court | Lawmakers under pressure to pass benefits fix for military families MORE (D-Md.), was attached to a bill that would give regulators more authority to block foreign investment in the U.S.

The Banking Committee approved the underlying bill unanimously, and I've got more on that markup here.


Bill to toughen reviews of foreign investments advances: The Senate Banking Committee on Tuesday approved a bill to give a secretive federal agency expanded powers to probe foreign acquisitions of American businesses that could pose threats to national security.

The panel voted unanimously to advance a bill to bolster the authority of the Committee on Foreign Investment in the U.S. (CFIUS), a panel housed by the Treasury Department that reviews attempts by foreign businesses to control U.S. firms.

The House Financial Services Committee had also been reviewing its version of the bill Tuesday and is expected to vote to clear the measure later this afternoon.

Why it's important: The push to boost the powers of CFIUS comes as President Trump and Congress seek to foil attempts by China to dominate key technology industries essential to U.S. defense and infrastructure.

I've got the details on what the bill does here.


MARKET CHECK: CNBC: "Stocks dropped on Tuesday after President Donald Trump said he was not satisfied with U.S.-China trade talks. He also said a highly anticipated summit with North Korea may not happen after all.

"The Dow Jones industrial average fell 178.88 points to close at 24,834.41 as Boeing shares declined 2.5 percent. The S&P 500 declined 0.3 percent to 2,724.44 with energy lagging. The Nasdaq composite lost 0.2 percent to close at 7,378.46."



  • The U.S. hit five Iranian nationals with sanctions on Tuesday for their roles in an alleged plan by Tehran to supply Houthi rebels in Yemen with ballistic missiles.
  • Acting IRS Commissioner David Kautter said Tuesday that the agency is on schedule in its preparations for next year's filing season, the first under the new tax law that President Trump signed late last year.
  • A former top energy and environment adviser to President Trump is leading an industry-backed effort to crack down on corporate shareholders' resolutions on hot-button controversies like climate change.
  • U.S. banks notched a record quarterly profit to start 2018, reporting $56 billion in net income in the first quarter, up 27.5 percent from the prior year's quarter.
  • A longtime business associate of President Trump's personal attorney Michael Cohen has reportedly agreed to cooperate with government prosecutors as part of a plea deal, according to The New York Times.
  • Democratic lawmakers are proposing a pay raise for teachers, and they plan to pay for it by eliminating a tax cut for the top 1 percent of earners.