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 TrumpMark Kelly clinches Democratic Senate nod in Arizona Trump camp considering White House South Lawn for convention speech: reports Longtime Rep. Lacy Clay defeated in Missouri Democratic primary 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 ObamaBass honored US Communist Party leader in unsurfaced remarks WNBA players wear 'Vote Warnock' shirts in support of Loeffler Democratic challenger Michelle Obama wishes Barack a happy birthday: 'My favorite guy' 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 looks to other statutes to expand scope of coming 'secret science' rule EPA ordered to reconsider New York efforts to tame downwind pollution OVERNIGHT ENERGY: EPA declines to tighten smog standards amid pressure from green groups | Democrats split on Trump plan to use development funds for nuclear projects| Russian mining giant reports another fuel spill in Arctic MORE's chief of security, in violation of ethics rules.

In a letter sent to Pruitt on Tuesday, Sens. Sheldon WhitehouseSheldon WhitehouseLiability shield fight threatens to blow up relief talks Democrats call for McConnell to bring Voting Rights Act to floor in honor of Lewis Hillicon Valley: Russian hackers return to spotlight with vaccine research attack | Twitter says 130 accounts targeted in this week's cyberattack | Four fired, dozens suspended in CBP probe into racist, sexist Facebook groups MORE (D-R.I.) and Tom CarperThomas (Tom) Richard CarperHouse committee requests hearing with postmaster general amid mail-in voting concerns Senators press Postal Service over complaints of slow delivery Barrasso nuclear bill latest GOP effort to boost uranium mining 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 McCaskillDemocratic-linked group runs ads in Kansas GOP Senate primary Trump mocked for low attendance at rally Missouri county issues travel advisory for Lake of the Ozarks after Memorial Day parties 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 CantwellThe Hill's Coronavirus Report: Mike Roman says 3M on track to deliver 2 billion respirators globally and 1 billion in US by end of year; US, Pfizer agree to 100M doses of COVID-19 vaccine that will be free to Americans Overnight Energy: Supreme Court reinstates fast-track pipeline permit except for Keystone XL | Judge declines to reverse Dakota Access Pipeline shutdown OVERNIGHT ENERGY: Watchdog accuses Commerce of holding up 'Sharpiegate' report | Climate change erases millennia of cooling: study | Senate nixes proposal limiting Energy Department's control on nuclear agency budget 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 ZinkeTrump flails as audience dwindles and ratings plummet OVERNIGHT ENERGY: Senior Interior official contacted former employer, violating ethics pledge: watchdog | Ag secretary orders environmental rollbacks for Forest Service | Senate advances public lands bill in late-night vote Senior Interior official contacted former employer, violating ethics pledge: watchdog 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 MulvaneyMick MulvaneyFauci says positive White House task force reports don't always match what he hears on the ground Bottom line White House, Senate GOP clash over testing funds 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 FeinsteinDemocrats want Biden to debate Trump despite risks Mini-exodus of Trump officials from Commerce to lobby on semiconductors Doug Collins questions Loeffler's trustworthiness in first TV ad 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 administration ends Obama fair housing rule Castro urges Dems to seize moment on social reform Overnight Health Care: Fauci says 'bizarre' efforts to discredit him only hurt the White House | Alabama to require face masks | House panel probes 'problematic' government contracts 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)