On The Money: Waters clashes with Trump officials over 'disastrous' housing finance plan | Dems jump into Trump turf war over student loans | House passes bill targeting anonymous shell companies

On The Money: Waters clashes with Trump officials over 'disastrous' housing finance plan | Dems jump into Trump turf war over student loans | House passes bill targeting anonymous shell companies
© Greg Nash

Happy Tuesday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL--Waters clashes with Trump officials over 'disastrous' housing finance plan: A hearing Tuesday highlighted the deep divide between House Democrats and the Trump administration over housing policy as lawmakers pressed officials on their plans.

Three top Trump administration officials testified before the House Financial Services Committee, to explain their ambitious plan to reform the federal housing finance system.

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But the hearing was a contentious affair as Democrats challenged Treasury Secretary Steven MnuchinSteven Terner MnuchinTrump to tour Apple factory with Tim Cook on Wednesday The Hill's Morning Report — Public impeachment drama resumes today On The Money: Trump appeals to Supreme Court to keep tax returns from NY prosecutors | Pelosi says deal on new NAFTA 'imminent' | Mnuchin downplays shutdown threat | Trump hits Fed after Walmart boasts strong earnings MORE, Housing and Urban Development Secretary Ben CarsonBenjamin (Ben) Solomon CarsonTrump launches effort to boost support among black voters Zoning is not the answer to all our housing problems Freer housing is 'fairer housing' — HUD should tie funding to looser zoning MORE and Federal Housing Finance Agency Director Mark Calabria over the rise in housing costs and its devastating results.

"The Trump administration's housing finance reform plan would be disastrous for our housing system," Financial Services Chairwoman Maxine WatersMaxine Moore WatersHouse passes Ex-Im Bank reboot bill opposed by White House, McConnell White House, McConnell come out against House bill on Ex-Im Bank Divides over China, fossil fuels threaten House deal to reboot Ex-Im Bank MORE (D-Calif.) said. I explain the clash here.

 

The conflict: 

  • Both the administration and Democratic lawmakers have proposed plans to overhaul the federal housing finance system and expand affordable housing, some of which include broad overlap. 
  • Housing affordability is a top priority of Waters, who is from Los Angeles, where homelessness rose 12 percent last year.
  • Yet despite those shared concerns, Democrats and administration officials appeared to lack the trust necessary to break a decade-long stalemate on housing finance.
  • The Trump administration has proposed steps to overhaul the housing finance system, including forcing Fannie and Freddie to boost capital reserves and reduce their footprint before releasing them to the private sector.
  • Such steps would not need congressional approval but wouldn’t address the potential harm that could come from abruptly pulling crucial federal support for low-income housing.

 

ON TAP TOMORROW

 

LEADING THE DAY

Democrats jump into Trump turf war over student loans: The director of the Consumer Financial Protection Bureau (CFPB) is facing growing pressure from liberal critics to challenge another Trump agency, the Department of Education, and crack down on abusive student lending practices.

The pressure is putting Kraninger in a difficult spot. I explain why here.

 

The issue: 

 

The context:

  • The CFPB and Education Department have sparred over who is in charge of handling fraud in the nation's student loan industry since DeVos's confirmation as Education secretary in 2017.
  • While DeVos's department is responsible for holding the roughly $1.5 trillion in federal student loans, the CFPB is charged with policing loan servicers -- including federal contractors -- for consumer fraud and abuse.
  • Under the Obama administration, the two cooperated to oversee complaints of abusive practices against companies contracted by the federal government to collect student loans, such as Navient.
  • Under the Trump administration, the Education Department canceled an information-sharing agreement with the CFPB in 2017, telling the bureau it "takes exception" to the agency "unilaterally expanding its oversight role to include the Department's contracted federal loan servicers."

 

House passes bill taking aim at anonymous shell companies: The House on Tuesday passed legislation aimed at cracking down on the use of anonymous shell companies for illicit activities.

The bill passed by a vote of 249-173. Twenty-five Republicans joined most Democrats in voting for the bill, while five Democrats voted against it. The Hill's Naomi Jagoda breaks it down here.

  • Under the bill, certain corporations and limited liability companies would be required to disclose their true owners to the Treasury Department's Financial Crimes Enforcement Network (FinCEN) at the time the companies are formed.
  • They'd also have to submit annual filings with FinCEN listing their current true owners and any changes to ownership. There would be penalties for people who intentionally submit fraudulent or incomplete information.
  • The disclosure requirements don't apply to companies that have more than 20 employees and $5 million in gross receipts, because these companies are less likely to be anonymous shell companies.

 

GOOD TO KNOW

 

ODDS AND ENDS

  • Facebook on Tuesday announced a $1 billion investment aimed at addressing California's affordable housing crisis, including up to 20,000 new housing units.
  • Op-Ed: Former Homeland Security Secretary Michael Chertoff argues why shell corporations "pose a major risk to our national security."