Overnight Regulation: Lawmakers nearing deal to ease bank regs | EPA to limit settlements with green groups | Trump promises action on drug prices
Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Monday evening and the Senate is back in town after a week off, while the House is out. President Trump held a press conference with Senate Majority Leader Mitch McConnell (R-Ky.) from the Rose Garden, and called their relationship “outstanding.”
THE BIG STORY: Top White House economic adviser Gary Cohn said Monday that Congress could act to exempt major United States banks from tight Dodd-Frank Act banking rules by the end of 2017.
Cohn, speaking to a banking industry conference in Chicago, said the White House and lawmakers from both parties are nearing an agreement to raise the threshold at which a bank is considered a “systemically important financial institution,” or “SIFI.” Such banks are subject to stricter federal oversight and higher stability standards.
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Cohn said that the new SIFI threshold could be raised to at least $200 billion from its current $50 billion level.
“We need to move those capital levels back to more rational levels,” Cohn, director of the White House’s National Economic Council, told the American Banking Association conference.
The law: Passed after the 2008 financial crisis, Dodd-Frank requires tougher federal oversight of the nation’s banking system. It creates increasing levels of federal oversight and higher capital requirements for banks. The rules are meant to ensure that banks do not fail and trigger a crisis.
Banks with more than $10 billion in assets face stricter inspections from federal regulators, and banks with more than $250 billion face even tighter requirements.
The concerns: The banking industry has long complained that the $50 billion SIFI threshold is an arbitrary level that includes banks too small to make a major dent on the global economy. Raising the SIFI level above $50 billion would exempt several U.S. regional banks from regulations they say stifle their ability to lend to worthy customers.
Sylvan Lane has the details here.
ON TAP FOR TUESDAY
The Senate Health Committee holds a hearing on the cost of prescription drugs, specifically “How the Drug Delivery System Affects What Patients Pay.”
The Senate Banking Committee holds a hearing on data security.
Bloomberg Government hosts an event on “The Future of Multifamily Housing: Building Access and Affordability.”
REG ROUNDUP
Environment: The Trump administration’s Environmental Protection Agency (EPA) is pledging to crack down on settlements with green groups that sue the agency.
“The days of regulation through litigation are over,” EPA Administrator Scott Pruitt said in a statement on Monday announcing a new policy that seeks to increase transparency in the process through which the agency settles regulatory lawsuits with environmentalists and other outside groups.
“We will no longer go behind closed doors and use consent decrees and settlement agreements to resolve lawsuits filed against the agency by special interest groups where doing so would circumvent the regulatory process set forth by Congress,” Pruitt said, adding that he is also cracking down on attorneys’ fees paid to litigants.
Under Pruitt’s new directive, the agency will post all lawsuits online, reach out to affected states and industries and seek their input on any potential settlements.
The EPA is pledging to avoid settlements that would make for a rushed regulatory process, or that obligate the agency to take actions that the federal courts do not have the authority to force.
Technology: The U.S. Supreme Court has agreed to hear the Department of Justice (DOJ)’s challenge in an ongoing legal battle over whether data stored by American companies overseas is covered by a U.S. warrant.
The Supreme Court disclosed in its order list released on Monday that it will take up the case, U.S. v. Microsoft, in which federal investigators sought data from Microsoft that was stored on servers in Ireland.
The case hinges on whether a U.S. warrant can compel American companies to turn over data stored on servers outside the United States. A lower court ruled last year that it does not, meaning that the DOJ needs to follow the same procedures used to obtain physical evidence stored outside the United States.
In December 2013, the U.S. government issued a warrant tied to an ongoing criminal narcotics investigation to seize data contained in an email account of a Microsoft customer. Microsoft refused to turn over the emails associated with the account, which were stored on servers in Ireland, spurring a legal battle that has dragged on for four years.
The DOJ filed a motion to take the case to the Supreme Court in June. The landmark case has spurred debate among lawmakers in Washington about how to update current laws governing data privacy and law enforcement access to data across national borders.
Finance: The chairman of the House Financial Services Committee is praising Education Secretary Betsy DeVos for scaling back plans to work with the Consumer Financial Protection Bureau (CFPB) to crack down on predatory student lenders.
Chairman Jeb Hensarling (R-Texas) in a letter to DeVos called it a “necessary and appropriate” step to curb the consumer bureau’s “overreach into the education field.”
Hensarling is one of the consumer agency’s fiercest critics.
The Education Department cancelled agreements with the CFPB in August, claiming the bureau “unilaterally expand[ed] its oversight role to include the Department’s contracted federal loan servicers.” The department called CFPB’s actions “characteristic of an overreaching and unaccountable agency.”
The consumer agency has pushed back on DeVos’s claims. The agency said the Education Department didn’t express any concerns before canceling the partnership. CFPB Director Richard Cordray defended his agency’s work in a lengthy response to DeVos, asking her to reconsider the decision.
Health care: President Trump on Monday attacked prescription drug companies and hinted at taking action to bring down rising drug prices.
“We are going to get prescription drug prices way down because the world is taking advantage of us,” Trump said during a wide-ranging press conference.
He noted the same drug sold outside the U.S. sometimes costs a fraction of what it does in the U.S.
“The same exact pill from the same company, same box, same everything, is a tiny fraction of what it costs in the United States,” Trump said.
Earlier in the day, Trump told Cabinet members that drug companies were ” frankly getting away with murder,” a phrase he first used on the campaign trail.
The administration has yet to take any substantive action on drug prices, but officials floated a draft executive order over the summer that would have lowered regulatory barriers for drug companies in order to increase competition.
Environment: A conservative think tank is raising concerns about an Energy Department plan to help boost coal and nuclear power.
An analyst for the American Action Forum said the proposal, announced this month by Energy Secretary Rick Perry, aims to address a “real problem” with “not the best solution.”
Perry’s proposal aims to prop up coal and nuclear plants by mandating higher payments for their electricity, arguing the two power sources are able to store so much of their fuel on site that they help support the reliability and resilience of the electric grid.
But Philip Rossetti, an AAF data analyst, said the plan “does not promote a policy that would necessarily achieve” a more stable electricity system, and instead would “arbitrarily value nuclear and coal power above their market rates.”
Health care: President Trump said he was going to take a Washington Post and “60 Minutes” joint investigation “very seriously” after both news outlets published reports suggesting his pick for drug czar led efforts to weaken enforcement of drug policing laws.
Trump also said his administration would be officially declaring the opioid epidemic a national emergency next week. It’s been more than two months since Trump said his administration was drafting paperwork to do so.
Trump said he saw the in-depth news reports released Sunday, which detailed legislation that reportedly weakened the Drug Enforcement Administration’s authority to halt drug distributors while the nation faces a major opioid epidemic.
Rep. Tom Marino (R-Pa.), whom Trump nominated in early September to head the Office of National Drug Control Policy, was reportedly the lead advocate for the legislation.
Trump called Marino — an early backer of Trump — a “good man,” adding he hadn’t spoken to Marino on Monday. Marino hasn’t had a confirmation hearing in the Senate, and Senate Judiciary Committee aides said his paperwork has not been completed.
The reports drew quick backlash from Sen. Joe Manchin (D-W.Va.), whose home state has been hit particularly hard by the opioid epidemic. Manchin asked Trump to withdraw Marino’s nomination in a letter sent Monday.
Health care: Negotiations on a bipartisan bill to fund the popular Children’s Health Insurance Program (CHIP) have made little progress, a top House Republican said Monday.
Energy and Commerce Committee Chairman Greg Walden (R-Ore.) said Democrats have not made a counteroffer on paying for an extension of the program.
“Despite Ranking Member [Frank Pallone Jr.’s (D-N.J.)] statement calling for renewed bipartisan negotiations nearly two weeks ago, we have yet to receive a single counteroffer from our Democratic colleagues,” Walden said in a statement.
“If Democrats are serious about funding these important programs, I call on them to follow through on their offer for renewed negotiations. There is too much at stake for partisan games and gridlock.”
The Energy and Commerce Committee passed a bill extending funding for the program earlier this month with no Democratic support.
Gun control: Rep. Scott Taylor (R-Va.) in an interview broadcast Sunday said the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) should re-evaluate bump stocks in the wake of last week’s mass shooting in Las Vegas.
“I think that should be re-evaluated,” Taylor told ABC News’s “This Week” during an interview focusing on gun legislation with Rep. Seth Moulton (D-Mass.).
“I’m not willing to impede on someone’s rights just because of emotional rhetoric,” Taylor said in the interview.
The conversation between the two congressmen comes amid an ongoing debate on the bump stock devices, which were found in the hotel room of the suspected Las Vegas shooter after the attack. The device can be used to increase the rate of fire in semi-automatic weapons.
The National Rifle Association (NRA) last week said bump stocks “should be subject to additional regulations,” though it stopped short of calling for new legislation on guns.
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AM New York: ‘Juul’ e-cigarettes require stronger FDA regulation, Schumer says
Reuters: US judge invalidates Allergan patents on Restasis
Reuters: Wells Fargo brokerage to return $3.4 million for risky products
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