OVERNIGHT FINANCE: GOP leaders crack down after trade vote

TOMORROW STARTS TONIGHT: BOEHNER HITS BACK. Scott Wong reports: “House GOP leaders booted three members off the whip team for voting against a procedural rule that structured how a critical trade package was brought to the House floor last week.

— WHO’S OUT, via Wong: “Majority Whip Steve Scalise (R-La.) informed Reps. Cynthia Lummis (Wyo.), Steve Pearce (N.M.) and Trent Franks (Ariz.) on Monday that they were no longer a part of the GOP’s vote-counting operation, a source close to the whip team confirmed.”

{mosads}– WHY IT WENT DOWN, via Wong: “Scalise’s decision was based on longstanding whip team rules that stated members must “vote as a team on procedural matters” but are free to vote against leadership on underlying legislation, the source said.” http://bit.ly/1TrIKPW

— A NEW STRATEGY IN SIGHT? From Scott: “House GOP leaders are considering holding a vote as early as this week on a stand-alone bill granting President Obama fast-track trade authority, a senior leadership source said. The legislation would not include Trade Adjustment Assistance (TAA), a program that provides billions in funding for American workers harmed by trade. Free trade foes thwarted renewal of TAA last week in a bid to kill fast-track.” http://bit.ly/1elJl5N

— ALSO: OBAMA, PELOSI HEADED FOR SPLITSVILLE? Jordan Fabian: “A spokesman for President Obama on Tuesday said a break on trade between the president and House Minority Leader Nancy Pelosi (D-Calif.) has not harmed the relationship between the top Democrats.” http://bit.ly/1TrIYqd

THIS IS OVERNIGHT FINANCE, and it’s so humid outside. I just want to go see Jurassic World. Is it good? Tweet: @kevcirilli; email: kcirilli@digital-stage.thehill.com; and subscribe: http://digital-stage.thehill.com/signup/48

 Let’s go….

YELLEN BRACES FOR THE MEDIA, via The Associated Press: “On Wednesday, the Fed may sketch a slightly brighter picture of the economy in a statement after its latest policy meeting ends and in a news conference by Chair Janet Yellen to follow. The central bank will also update its economic forecasts.

“Among economists, the Fed is seen as wanting to prepare investors for a coming rate hike – if the economy continues to improve – while stressing the reassuring message that it will raise rates very gradually. The idea is to avoid spooking investors, who are already on edge over the likelihood of a rate hike and the threat of a default by Greece’s government. The Fed wants to convince the markets that the economy will be sturdy enough to withstand slightly higher rates.” http://bit.ly/1Sm0f2E

SIDE SHOW: THE DONALD ENTERS 2016. And that’s all we’re saying about it. The Hill’s report: http://bit.ly/1KX3NpQ WORTH WATCHING: My take for NC8 on former-Fla. Gov. Jeb Bush (R) entering the race: http://bit.ly/1GcA5qB

WARREN VS. DIMON – – THE POLICY BEHIND THE BITTER FEUD. Charles Gasparino, a senior correspondent with Fox News and Fox Business Network, in an op-ed for The Daily Beast: “The problem isn’t Dimon’s mansplaining. It’s that Warren is telling a truth no one else will tell: Big banks aren’t free-market at all…

“What’s great about the Warren vs. Dimon feud is that it both exposes Wall Street’s real crony capitalism roots and the hypocrisy of Hillary Clinton remaking herself in the Elizabeth Warren class-warrior mode. Yes it was Bill Clinton who enacted one of the least thought-out banking laws back in 1999 that made it legal to combine commercial-banking activities with Wall Street-style risk-taking.” http://thebea.st/1TrLFZ0

— OVERNIGHT MUSINGS: Moderate Republican candidates are walking a political tightrope with the “crony capitalism” rhetoric. Crony capitalism has proven to be effective messaging for the Republican Party to win over Tea Party conservatives (case-in-point: Ex-Im). But the more they make this argument against Clinton, it could potentially push away their business base.

HENSARLING PREPS FOR CNBC: House Financial Services Committee Chairman Jeb Hensarling (R-Texas) will be appearing tomorrow on CNBC’s Squawk Box. His hit time is 7:30 a.m. and he’ll be speaking about tomorrow’s FSOC hearing.

— HEARING PREP, just in time for tomorrow’s hearing: Ian Katz scoops for Bloomberg: “U.S. regulators will disclose to lawmakers more than 1,400 pages of documents explaining why companies such as American International Group Inc. and MetLife Inc. are subject to tougher oversight. The Financial Stability Oversight Council is providing the papers after Republicans complained the council is too secretive and hasn’t explained how companies that are labeled systemically important can escape the additional supervision. The documents cover the four nonbank financial companies that have been designated: AIG, MetLife, Prudential Financial Inc. and General Electric Co.’s finance arm, according to a letter last week from the Treasury Department.” http://bit.ly/1BhcBVy

SHELBY BILL LOSES STEAM, via me: “The negotiations on a sweeping regulatory overhaul have stalled more than one month after Senate Banking Committee Chairman Richard Shelby (R-Ala.) first proposed the legislation… Shelby’s effort to attract support from centrist Democrats on the Banking panel — particularly Sens. Mark Warner (Va.), Joe Donnelly (Ind.), Jon Tester (Mont.) and Heidi Heitkamp (N.D.) — appear to be making little headway, sapping momentum from the effort.” http://bit.ly/1GrR3o2

NOTABLE: GOP PRESSURES WH ON CYBER-ATTACK, via Cory Bennett: “House Oversight Chairman Jason Chaffetz (R-Utah) called on President Obama to fire at least two top officials from the embattled Office of Personnel Management (OPM) over their role in the massive data breach that has rattled the government.” http://bit.ly/1GLQabr

QUOTABLE, Export-Import Bank Chairman Fred Hochberg speaking to businesses in Chicago earlier today: “When you live in Washington, you spend time with a lot of talkers. My God, they do a lot of talking in Washington. So there’s nothing I love more than getting out of D.C. and going to places like Chicago, where I can spend time with doers.”

Three points:

1.) DAYS UNTIL EX-IM’s CHARTER EXPIRES: Six. 

2.) FIRST LOOK: GENERAL ELECTRIC CEO TO PRESS FOR BANK. General Electric CEO Jeffrey R. Immelt will address The Economic Club of Washington tomorrow at 12:25 p.m. His remarks, according to a source, will have a “particular emphasis on the consequences of the fractious debate over the U.S. Export-Import Bank.”

3.) FIRST LOOK: GREEN GROUPS TO PROTEST EX-IM, per a release: “A coalition of environmental and advocacy groups will deliver over 650,000 petition signatures to the U.S. Export-Import Bank calling on the bank to reject financing for the controversial Abbot Point coal export terminal and associated mine in Queensland, Australia.” Groups involved: Rainforest Action Network, Friends of the Earth, Avaaz, 350.org, Sierra Club, Greenpeace, and the Center for Biological Diversity.

STORM AHEAD: REPUBLICANS LOOK TO FREE CAPITAL FOR SMALL BIZ. Rep. Mick Mulvaney (R-S.C.) is working on bipartisan legislation that he says would make it easier for certain investment firms to finance the middle market. The switch would allow the firms to take on more risk, but Mulvaney says it could also allow more capital to reach people, helping the economy.

Let’s take a closer look…

1.) What are BDCs? As if Washington needs another acronym. BDCs are business development corporations (BDCs). They started in the 1980s when Congress created ’em as investment companies specifically tailored to providing financing for small- and medium-sized businesses. They do not take on nearly as much risk, per Congress’s orders.

2.) Why do lawmakers care? The 2010 Dodd-Frank Wall Street Reform law made it more difficult for big banks to invest in riskier financing that was used to help free up money to small and medium businesses. That created a HUGE gap in the market. And who do you think entered it? BDCs. Exactly. Just how big? Consider this: The publicly traded BDC market went from $2.2B in assets in 2000 to $56.5B in 2014 – an increase of 2,468 percent.

3.) What do BDCs want? Here’s the thing: they want to take on more risk, doubling it from a 1:1 leverage ratio to 1:2 leverage ratio. (Think of “leverage ratio” as a fancy, annoying term for how much risk Washington allows financial firms to take on.) The 1:2 ratio is still nowhere near what big banks take on in terms of risk. But liberals are always weary about letting anybody take on risk. BDCs are still a relatively young industry, and in previous Congressional cycles they haven’t been particularly well organized. All of that is about to change. My story: http://bit.ly/1R6pZO7

ON-TAP FOR TOMORROW: Rep. Scott Garrett (R-N.J.) will keynote tomorrow morning for Mercatus’ Financing the Future event. Mercatus nabbed several all-star wonks for their panel, including Hal S. Scott, a finance wiz professor from Harvard; Federal Deposit Insurance Corporation (FDIC) vice chairman Thomas Hoenig; and Securities and Exchange Commissioner Michael Piwowar. More info: http://bit.ly/1elH62o

ON-TAP FOR TOMORROW, per a release: “The Progressive Policy Institute (PPI) and the Georgetown Center for Business and Public Policy will host “The Tech Jobs Boom and Diversity: A Good News, Bad News Story” featuring a keynote by FCC Commissioner Mignon Clyburn.”

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