Overnight Finance: House threatens to freeze Senate Dodd-Frank rollback | New Russia sanctions | Trump vs. Trudeau on trade | Court tosses Obama financial adviser rule

Happy Thursday and welcome back to Overnight Finance, the newsletter that will never break your bracket. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

See something I missed? Let me know at slane@digital-stage.thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N.

 

THE BIG DEAL: The just-passed Senate bill to roll back the Dodd-Frank Act won’t see action in the House unless senators are willing to negotiate, a key GOP chairman said today.

House Financial Services Chairman Jeb Hensarling (R-Texas) told reporters that Speaker Paul Ryan said the bipartisan Senate bill to rollback the Dodd-Frank Act will “stay on his desk” unless senators agree to negotiate with the House.

“We’re not rubber stamping the bill,” said Hensarling, a close Ryan ally. “It’s got to be bipartisan and bicameral.”

Moderate Senate Democrats behind the bipartisan bill say they’re not willing to reopen the bill with the House and would disown major changes. They say excessive tinkering would break the fragile bipartisan balance behind their deal.

But Hensarling insisted they were being “presumptuous and naive” to think the House wouldn’t demand changes and assert its role as an equal chamber of Congress.

“I would be happy to share with them a copy of the Constitution,” Hensarling said.

I’ve got more on what Republicans want, and how Democrats are reacting, right here.

 

Reactions:

• “Our bill is the way to reach that bipartisan result that can actually pass in both chambers and become law.” — Sen. Heidi Heitkamp (D-N.D.)

• “Why would we also not allow our members in the House — Democrats and Republicans — to add their ideas on the same basis?” — Rep. French Hill (R-Ark.).

• “We’re sending a message to the Senate that we stand ready to negotiate.” — Rep. Jeb Hensarling (R-Texas).

• “I think [Hensarling] wants something as opposed to nothing, but I also think he’s going to tactically do the best he can to get the most he can.” — Rep. Dennis Ross (R-Fla.)

 

How we got here: While weakening Dodd-Frank has been a major Republican goal since the law passed in 2010, the House and Senate took different paths to attack the banking rules enacted by President Obama.

House Republicans led by Hensarling sought to repeal or rewrite as much of Dodd-Frank as possible. Their plan, the CHOICE Act, would have transformed or eliminated major parts of Dodd-Frank.

The bill would allow banks that reach certain cash thresholds an off-ramp from Dodd-Frank, reduce the frequency of federal stress tests and restrain oversight powers of several federal agencies that the 2010 law expanded. The CHOICE Act would have also placed strict limits on the Consumer Financial Protection Bureau (CFPB) and its funding.

The bill passed the House in 2017 and was immediately dismissed by the Senate as too conservative to pass the upper chamber. The GOP’s narrow Senate majority meant any bill to reel in Dodd-Frank would need Democratic support to avoid a filibuster.

Senators instead released the bill from Senate Banking Committee Chairman Mike Crapo (R-Idaho) last November with a dozen Democrats sponsoring the measure.

 

What comes next: There are two ways we move forward from here. Either the House caves and passes the Senate bill, or the Senate gives in and decides to broker a deal with the House. It’s hard to imagine a situation where a Senate-passed bill to revise Dodd-Frank dies in a GOP-controlled government, but it’s possible.

It’ll likely be weeks, if not months, before we know how this shakes out. Congress needs to pass another government funding bill by next Friday, and debate over the measure will dominate the week ahead.

Lawmakers will then leave for a two-week break before returning to Washington. We will be in the heart of campaign season before long, which has historically prevented Congress from getting much done beyond the bare essentials.

It’s going to be a bumpy ride ahead.

 

BREAKING

A divided federal appeals court on Thursday tossed out an Obama-era Department of Labor rule that required financial advisers to act in the best interest of their customers. The Hill’s Lydia Wheeler reports.

In a 2-1 ruling, the 5th Circuit Court of Appeals said the fiduciary rule bears the hallmarks of “unreasonableness” and constitutes an arbitrary and capricious exercise of administrative power.

The lawsuit stems from a challenge the U.S. Chamber of Commerce and eight other business and financial groups brought against the rule.

Check back at The Hill for more on the ruling.

 

LEADING THE DAY

New Russia sanctions: The U.S. will impose new economic sanctions on two-dozen Russian individuals and entities for cyberattacks in the U.S. and meddling in the 2016 election, senior national security officials said Thursday.

The Treasury Department will target five entities and 19 individuals from Russia for actions ranging from the “destabilizing efforts” in the 2016 presidential election to the “NotPetya” malware attack, the costliest and most disruptive in history.

Some of those entities and individuals — including the “Internet Research Agency,” which allegedly used fake social media accounts to sow division in the U.S. — have already been indicted by special counsel. The Hill’s Jonathan Easley tells us more.

Trump vs. Trudeau: President Trump on Thursday insisted that the U.S. has a trade deficit with Canada after he reportedly acknowledged mentioning the deficit to Canadian Prime Minister Justin Trudeau in a meeting without knowing if it was actually true.

Trump tweeted that the U.S. does “have a Trade Deficit with Canada,” noting that the U.S. has a deficit “with almost all countries.”

According to the Office of the U.S. Trade Representative, the U.S. actually has a trade surplus with Canada. Data by Statistics Canada, however, shows that Canada has a trade surplus with the U.S.

So, about those tariffs: The Trump administration’s trade policy will go under the microscope next week at the House Ways and Means Committee. 

U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross are scheduled to testify amid growing concern from lawmakers over President Trump’s recent tariff announcements and the threat of significant trade restrictions against China.

Lighthizer, the nation’s top trade official, will appear on Wednesday, followed by Ross on Thursday, the panel announced.

The top officials will likely be peppered with questions about Trump’s formal announcement last week that he will slap tariffs of 25 percent on steel imports and 10 percent on aluminum imports over national security concerns. The Hill’s Vicki Needham previews their appearances here.

MARKET CHECK: Mixed. It was another jumbled day for U.S stocks. The Dow Jones industrial average ended the day up 0.5 percent, while the Nasdaq and Standard and Poor’s 500 took 0.2 percent and 0.08 percent losses respectively.

 

GOOD TO KNOW

• Treasury Secretary Steven Mnuchin spent nearly $1 million on seven military aircraft trips between the spring and fall of 2017, according to documents gathered by Citizens for Responsibility and Ethics in Washington (CREW).

• The liberal Not One Penny coalition announced Thursday that it plans to hold more than 100 events across the country during the weekend before the tax-filing deadline to press for repeal of President Trump’s tax-cut law.

• The amount of money the U.S. government spends servicing its debt would surpass defense spending by 2024 and Medicaid spending by 2021, according to a study by the Committee for a Responsible Federal Budget (CRFB).

 

ODDS AND ENDS

• Bloomberg Businessweek looks into when a woman could take the helm of Goldman Sachs.

• Spotify’s stock will hit the New York Stock Exchange on April 3, the music streaming service announced during an “investor day” presentation on Thursday.