Overnight Finance

On The Money: Waters calls for resignation of two Wells Fargo directors, floats criminal referral for ex-CEO | Stocks plunge amid fresh coronavirus fears | Judge gives Dems one week to make move in Trump tax return case

Happy Thursday and welcome back to On The Money, where we firmly believe that Bailey did nothing wrong. 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 calls for resignation of two Wells Fargo directors, floats criminal referral for former CEO: The chairwoman of a powerful House committee on Thursday called for two members of Wells Fargo’s board of directors to resign and said she may refer its former chief executive to the Justice Department for lying under oath to Congress.

Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee, said Wednesday that Wells Fargo directors Betsy Duke and James Quigley “failed in their responsibilities” to overhaul the scandal-ridden bank. Both are set to testify before the panel next week.

The chairwoman also said she may refer former Wells Fargo chief executive Timothy Sloan to federal prosecutors for allegedly lying to her committee during a March 2019 hearing.

I’ve got more on Waters’s rebuke of Wells Fargo here.

Waters’s call comes after her committee released a report Wednesday documenting how Duke, Quigley and senior Wells Fargo leadership repeatedly failed to comply with and take seriously the demands of federal bank regulators. 

  • Waters told reporters that Duke and Quigley’s failure to halt abusive and misleading sales practices and bring the bank into compliance with federal settlements was a “dereliction of their duty.”
  • Waters also said Thursday she had additional evidence that Sloan may have lied before the Financial Services panel. Witnesses who testify before Congress swear an oath to tell the truth under the penalty of perjury charges.
  • Sloan told the Financial Services panel in March that Wells Fargo was “in compliance” with orders from federal bank regulators — the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) — to detail how it would repay jilted customers and prevent further sales scandals.
  • Even so, officials at the Federal Reserve, CFPB and OCC repeatedly rejected Wells Fargo’s plans, according to emails cited in the report, finding them to be incomplete and insufficient to address the terms of the settlements.

 

LEADING THE DAY

Judge gives Democrats one week for next move in Trump tax return case: A federal judge on Thursday gave House Democrats one week to figure out how they want to move forward in their lawsuit to obtain President Trump’s tax returns from the administration.

House Democrats are seeking Trump’s returns both under a subpoena from House Ways and Means Committee Chairman Richard Neal (D-Mass.) and through a provision under the federal tax code.

  • Judge Trevor McFadden, a federal district court judge in Washington, D.C., appointed by Trump, held a hearing in the tax return case following a ruling in another major case that touched on some of the same legal questions.
  • McFadden’s hearing came less than one week after a three-judge panel at the U.S. Court of Appeals for the D.C. Circuit in a separate lawsuit ruled that House Democrats cannot sue to enforce a subpoena of former White House Counsel Don McGahn.
  • The ruling said federal courts can’t resolve disputes between the executive and legislative branches. McFadden had put the tax return case on hold until a ruling was issued in the McGahn case.

The Hill’s Naomi Jagoda tells us more about the hearing and today’s ruling here.

 

Stocks crater under coronavirus concerns as volatility haunts Wall Street: Stocks closed with steep losses Thursday after coronavirus fears claimed nearly all of the gains from a colossal Wednesday rally.

The Dow Jones Industrial Average closed with a loss of 969 points, a 3.6 percent drop that nearly erased a 1,173-point Wednesday surge driven by soaring health care shares. The S&P 500 closed with a loss of 3.4 percent, while the Nasdaq composite closed 3.1 percent down.

  • Wall Street has been wracked by volatility in the nearly two weeks since the first cases of coronavirus contracted through community spread appeared in the U.S. 
  • At least 162 people across 18 states have either tested positive for the coronavirus or are presumed positive by doctors, according to federal and state data, and the illness has claimed at least 11 lives in the U.S.
  • The steady rise in confirmed coronavirus cases has fueled intense anxiety among investors and concerns among economists that efforts to contain the virus and its disruption of global activity could spur a severe downturn.

 

GOOD TO KNOW

  • OPEC members are calling for a reduction in oil production around the world to counter dropping prices thought to be a result of the global coronavirus outbreak.
  • Tax proposals from former Vice President Joe Biden would raise about $4 trillion over 10 years and lead to the largest tax increases for high-income people, according to a paper released Thursday by the Urban-Brookings Tax Policy Center (TPC).
  • Sen. Ed Markey (D-Mass.) is asking Amazon for answers on price gouging on its platform amid reports of some items facing up to 2,000 percent markups as the coronavirus spreads globally. 

 

ODDS AND ENDS

  • Op-ed: Claudia Sahm, director of macroeconomic policy for the Washington Center for Equitable Growth, on “Why government leaders must act now to address the next recession”
Tags Donald Trump Ed Markey Joe Biden Maxine Waters Richard Neal

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