Overnight Regulation: Senate takes first step to passing Dodd-Frank rollback | House passes bill requiring frequent reviews of financial regs | Conservatives want new checks on IRS rules

Overnight Regulation: Senate takes first step to passing Dodd-Frank rollback | House passes bill requiring frequent reviews of financial regs | Conservatives want new checks on IRS rules
© Greg Nash

Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It's Tuesday night in Washington, where President TrumpDonald John TrumpFive landmark moments of testimony to Congress Lindsey Graham basks in the impeachment spotlight Democrats sharpen their message on impeachment MORE's top economic adviser is stepping down over planned tariffs.



The Senate on Tuesday took its first step toward passing a major bipartisan rollback of the tough banking rules enacted by former President Barack ObamaBarack Hussein ObamaSaagar Enjeti dismisses Warren, Klobuchar claims of sexism Pennsylvania's other election-night story Buttigieg praises Obama after Los Angeles Times corrects misquote MORE after the 2008 financial crisis.

Senators voted 67 to 32 to take up a motion to start debating a bipartisan bill to exempt dozens of banks from parts of the Dodd-Frank Act, passed in 2010 to make the financial system safer and stronger.

Republicans and a coalition of moderate Democrats voted to move ahead with the bill they call an overdue fix to Dodd-Frank that would help smaller firms boost rural and struggling economies.

But Democrats are deeply divided, and have feuded over both the policy included in the bill and the intentions of its sponsors.

What does the bill do? The bill would exempt all banks with less than $250 billion in assets from tighter Federal Reserve oversight by raising the threshold at which a bank or firm is considered "systemically important."

Currently, banks with more than $50 billion in assets are subject to yearly stress tests and higher capital requirements and must submit an annual "living will" to explain how the firm could be liquidated without causing a financial crisis.

Under the bill, the threshold would be reset to $250 billion. That frees more than 20 banks and financial firms from those rules, and also exempts banks with less than $100 billion from Dodd-Frank stress tests.

Why would Democrats support this? Many of the bill's leading Democratic backers are moderate senators running for re-election this year in states that overwhelmingly voted for President Trump in 2016. Liberal senators with strong progressive followings who are seen as potential 2020 presidential contenders are leading the opposition.

Sylvan Lane has the story here.



A House Appropriations Subcommittee holds a hearing on the fiscal 2019 budget request for the Commodity Futures Trading Commission. Chairman Chris Giancarlo is testifying.

The House Financial Services Subcommittee on Housing and Insurance holds a hearing on the "State Insurance Regulation Preservation Act."

The House Financial Services Subcommittee on Financial Institutions and Consumer Credit holds a hearing on legislative proposals requiring companies to disclose data breaches.

The House Small Business Committee holds a hearing on how the GOP and President Trump's push to roll back regulations is affecting small businesses.

The House Natural Resources Committee holds a hearing on three bills, including a measure to improve the development of domestic sources of minerals important to national security.

The House Energy and Commerce Committee holds a hearing on "The Future of Transportation Fuels and Vehicles."



Finance: A bipartisan bill requiring financial regulators to more frequently conduct comprehensive reviews of their banking regulations easily passed the House on Tuesday.

Rep. Barry Loudermilk's (R-Ga.) Comprehensive Regulatory Review Act passed by a 264-143 vote, which included the support of 38 Democrats.

The legislation amends the Economic Growth and Regulatory Paperwork Reduction Act to require the Federal Financial Institutions Examination Council (FFIEC) and each federal financial agency to conduct a regulatory review every seven years.

Under the new legislation, agencies would be required to tailor regulations in an effort to reduce burdens on covered entities, including the cost of regulatory compliance and liability risk.

Loudermilk touted the bill as a simple and common sense measure to reduce the burdens of what he calls outdated and unnecessary red tape placed on small banks and lending institutions.

The Hill's Lydia Wheeler has the rest of the story here.


Tech: The House on Tuesday voted to reauthorize the Federal Communications Commission (FCC), passing bipartisan legislation that includes provisions aimed at boosting the development of 5G networks and new funds for the agency's spectrum incentive auction.

If the bill passes, it will be the first time Congress has approved a reauthorization for the FCC in 28 years. The House approved it by voice vote Tuesday afternoon. The package also authorizes funds for radio and television broadcasters affected by the FCC incentive auction.

Read Harper Neidig's story here.


Environment: Two Democratic senators want to know whether the Environmental Protection Agency (EPA) awarded a security contract to a company linked to EPA Administrator Scott PruittEdward (Scott) Scott PruittEPA rule proposes to expand limitations on scientific studies Overnight Energy: Fight between EPA watchdog, agency lawyers heats up | Top EPA official under investigation over document destruction | DOJ issues subpoenas to automakers in California emissions pact Top EPA official under investigation in document destruction MORE's chief of security, in violation of ethics rules.

In a letter sent to Pruitt on Tuesday, Sens. Sheldon WhitehouseSheldon WhitehouseDemocratic senators seek documents on Trump's alleged call for Barr press conference Senate committee advances budget reform plan Bipartisan Enzi-Whitehouse budget bill a very bad fix for deficits MORE (D-R.I.) and Tom CarperThomas (Tom) Richard CarperDemocrats give Warren's 'Medicare for All' plan the cold shoulder Liz Cheney applauds Trump for pulling out of Paris climate agreement Overnight Energy: Trump formally pulls out of landmark Paris climate pact | EPA to ease rules on waste from coal-fired power plants | States, green groups sue to save Obama lightbulb rules MORE (D-Del.) say a contract awarded to Edwin Steinmetz Associates, a company owned by the vice president of technical surveillance countermeasures at Sequoia Security Group, may represent a conflict of interest.

Pruitt's head of security detail, Pasquale "Nino" Perrotta, is a principal of the same security company, according to his LinkedIn page.

The senators said Perrotta's business ties could violate a number of government ethics rules and asked the EPA to provide them with details proving that Perrotta's outside employment with his security company was in compliance with the law.

Miranda Green has the rundown here.


Tech: Singapore-based Broadcom's hostile takeover bid of Qualcomm poses a possible threat to national security, the U.S. government said Tuesday, noting that the acquisition could threaten America's standing as a leader in developing 5G networks and other emerging technology.

In a letter to the company dated Monday but made public Tuesday, the Committee on Foreign Investment in the U.S. (CFIUS) said it was worried Broadcom's takeover would threaten Qualcomm's investments in research and development, opening a doorway for China to overtake the U.S. in innovation.

The CFIUS has been active in blocking Chinese efforts to buy up U.S. companies, but this appears to be the first time the obscure committee has inserted itself in an active takeover process.

Qualcomm agreed to postpone its annual shareholder meeting this week in order for the panel to investigate the takeover bid. Bloomberg reported that Broadcom's slate of board of director candidates was expected to be elected at the meeting. The government's move, however, could spoil Broadcom's efforts to take over the American company.

Harper Neidig has more on the story here.


Finance: Conservative groups and some GOP lawmakers are pushing for more oversight of IRS rules as the agency works to carry out President Trump's new tax law.

They are calling for the agency's tax regulations to be subjected to more review from the Office of Management and Budget (OMB). They also want the IRS to conduct cost-benefit analyses of regulations to determine how they will affect the economy.

Federal agencies are typically required to analyze the economic impacts of their significant rules, conducting cost-benefit analyses and examining alternatives. They're required to present those analyses to the OMB's Office of Information and Regulatory Affairs (OIRA), which provides feedback and often circulates rules to other agencies for comment.

IRS rules, for the most part, do not go through the OMB review process or receive a cost-benefit analysis.

"The IRS must live by the same rules of administrative law and agency oversight as the rest of the Executive Branch," a coalition of conservative-leaning groups -- including the Cause of Action Institute, Americans for Tax Reform, the National Taxpayers Union and groups associated with conservative donors Charles and David Koch -- wrote in a recent letter to Trump and other administration officials.

Naomi Jagoda has more here.


Health care: A Democratic senator on Tuesday accused the world's largest generic drugmaker of "stonewalling" an investigation into the role opioid manufacturers and distributors play in the current drug crisis.

Sen. Claire McCaskillClaire Conner McCaskillGOP senator rips into Pelosi at Trump rally: 'It must suck to be that dumb' Iranian attacks expose vulnerability of campaign email accounts Ex-CIA chief worries campaigns falling short on cybersecurity MORE (D-Mo.) said Teva Pharmaceutical Industries has only provided general information in response to repeated inquiries by her office.

McCaskill said the company has not provided her with correspondence between the company and its buyers detailing efforts to combat drug diversion.

She said Teva has also declined to turn over copies of internal audits of pharmacies and other customers that might show whether the company identified customers who placed questionable opioid orders.

I have the full story here.


Tech: Puerto Rico and the U.S. Virgin Islands would receive nearly $1 billion to rebuild and expand broadband networks under a package proposed by Federal Communications Commission (FCC) Chairman Ajit Pai.

The proposal would allocate $64 million immediately to efforts to restore the existing networks in the territories, which were devastated by hurricanes last year. The rest of the $954 million would go toward medium- and long-term projects to expand mobile and fixed broadband networks.

"The people of Puerto Rico and the U.S. Virgin Islands are still recovering from last year's devastating storms," Pai said in a statement. "That means the FCC's work is far from over."

Harper Neidig has more here.


Labor: Business owners will be allowed to report themselves for potentially violating overtime and minimum wage laws to avoid hefty fines under a Department of Labor pilot program announced Tuesday.

The Payroll Audit Independent Determination system is a self-auditing program that the DOL's Wage and Hour Division said it will implement nationwide for six months.

The agency said the program aims to resolve claims expeditiously without litigation to improve employers' compliance with overtime and minimum wage obligations under the Fair Labor Standards Act.

The agency said companies that participate in the program by reporting violations and proactively working to resolve issues will not be forced to pay any civil monetary penalties.

DOL said employers, however, are not allowed to participate if they are in litigation or currently under investigation for wage and hour violations.

Lydia Wheeler has the story here.


Environment: A group of Senate Democrats is asking the Trump administration to extend the comment period for its controversial offshore drilling plan.

Sen. Maria CantwellMaria Elaine CantwellSenators introduce cybersecurity workforce expansion bill Boeing chief faces anger over 737 crashes at hearing Zuckerberg launches public defense of Facebook as attacks mount MORE (Wash.), the top Democrat on the Energy and Natural Resources Committee, led 22 colleagues in a Monday letter to Interior Secretary Ryan ZinkeRyan Keith ZinkeOvernight Energy: Senate eyes nixing 'forever chemicals' fix from defense bill | Former Obama EPA chief named CEO of green group | Senate reviews Interior, FERC nominees criticized on ethics Senate reviews Interior, FERC nominees criticized on ethics Overnight Energy: Perry to step down as Energy secretary | Future of big-game hunting council up in the air | Dems lose vote against EPA power plant rule MORE seeking the extension.

Friday is the end of a two-month period in which the Interior Department is taking comments on its plan. The plan, released in January, floated drilling almost everywhere it could be legally allowed: along the entire Pacific, Atlantic and Gulf coasts, as well as all around Alaska, except Bristol Bay.

The lawmakers also criticized the entire public input process, including events Interior has been holding in coastal states, and called for more input opportunities.

Timothy Cama has more here.


Finance: The former CEO of a payday lender that was investigated by the Consumer Financial Protection Bureau (CFPB) pitched herself as a candidate for the agency's director position, The Associated Press reported Tuesday.

The AP reported that Janet Matricciani, the former CEO of World Acceptance, emailed acting CFPB head Mick MulvaneyJohn (Mick) Michael MulvaneyMulvaney to file separate suit to fight impeachment subpoena Trump circuit court nominee in jeopardy amid GOP opposition White House struggles to get in sync on impeachment MORE two days after the agency announced it had finished the investigation and that Matricciani had resigned. The bureau did not take enforcement action against the company.

A senior adviser to Mulvaney told the AP that Matricciani is not under consideration for any positions at the bureau.

Jacqueline Thompson has the rest here.


Court battles: One of President Trump's judicial picks is drawing scrutiny for what a top Democrat says is a failure to be completely forthcoming with the Senate Judiciary Committee.

Sen. Dianne FeinsteinDianne Emiel FeinsteinHarris shares video addressing staffers the night Trump was elected: 'This is some s---' Centrist Democrats seize on state election wins to rail against Warren's agenda Senate talks on stalled Violence Against Women Act reauthorization unravel MORE (Calif.), the committee's top Democrat, said in a statement Tuesday that a review of Louisiana Eastern District Court nominee Wendy Vitter's written questionnaire showed she failed to disclose a political ad as well as several public speeches, including to anti-abortion groups.

Feinstein said she's concerned that failures to disclose relevant information and materials to the committee are becoming a pattern under the Trump administration.

The administration was forced to withdraw Brett Talley's nomination to be a federal judge in Alabama after it was revealed that he failed to disclose online posts, including one in which he defended the Ku Klux Klan. He also failed to tell the committee he is married to a White House lawyer.

Read Lydia Wheeler's story here.


Administration: A top official in the Department of Housing and Urban Development (HUD) is accusing HUD 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 of a "witch hunt" against staffers, including the employee who recently revealed Carson's spending on office furniture.

Marcus Smallwood, the department's director of records, wrote in an email to Carson and other top housing officials that they were operating the department in a way meant to intimidate other employees, according to multiple reports.

"Helen Foster is not the only person at Hud that has been persecuted in this witch hunt under your watch," Smallwood wrote, referring to the employee who revealed HUD's spending on office furniture, The Guardian reported.

HUD spokesman Raphael Williams said in an email that the agency doesn't comment on pending cases and hasn't officially commented on Foster's allegations. He said that Smallwood's email "is under review."

Jacqueline Thompson has more here.



Federal regulators need to revisit electronic tracking rule for truckers



Fed considering 'broad revisions' to Volcker Rule compliance -- The Wall Street Journal

The 5 ways the Senate plans to roll back regulations on Wall Street -- The Washington Post

Smucker, Conagra call off $285M Wesson oil deal after FTC complaint -- Chicago Tribune

Democrats fail to mend split over rolling back Dodd-Frank financial regulations (Los Angeles Times)

Virtual currencies are commodities, U.S. judge rules (Reuters)

British treasury chief makes case for including financial services in EU trade deal (The Wall Street Journal)

FDA OKs 23andMe home breast cancer DNA test, with warning (NBC News)