Business & Economy

On The Money: Mnuchin sees ‘strong likelihood’ of needing another COVID-19 relief bill | 2.4 million more Americans file new jobless claims | Top bank regulator abruptly announces resignation

Happy Thursday and welcome to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL — Mnuchin sees ‘strong likelihood’ of needing another COVID-19 relief bill: Treasury Secretary Steven Mnuchin on Thursday said there is a “strong likelihood” that another coronavirus relief bill will be needed as more states start to reopen and the economy struggles to stabilize.

“We’re going to carefully review the next few weeks,” Mnuchin said in an interview with The Hill’s Bob Cusack during a virtual event. “I think there is a strong likelihood we will need another bill, but we just have $3 trillion we’re pumping into the economy.”

“We’re going to step back for a few weeks and think very clearly how we need to spend more money and if we need to do that,” he added.

Mnuchin’s comments — which came during The Hill’s Advancing America’s Economy Summit, sponsored by Wells Fargo and Siemens — follow those of White House economic adviser Kevin Hassett, who said earlier this week that he thinks another coronavirus bill might not be necessary. The Hill’s Naomi Jagoda has more here.

On Capitol Hill, Republicans and Democrats are divided over how to tackle additional legislation.

  • House Democrats last week passed a $3 trillion relief package, but Senate Republicans have said that bill is dead on arrival in their chamber. 
  • Some GOP senators have indicated they want to move quickly on another measure, but Senate Majority Leader Mitch McConnell (R-Ky.) has signaled a desire to proceed slowly in order to first evaluate what is and isn’t working from previous relief bills that were signed into law.

More from Mnunchin’s interview:

  • Mnuchin said Thursday that “we do need to fix the quirk” with the unemployment benefits expansion that has resulted in some people receiving more in benefits than they did in wages when they were working.
  • He also said that the Trump administration is working with Congress on lengthening the amount of time that businesses have to use Paycheck Protection Program funding, and that there is bipartisan support to extend the period from 8 weeks to 10 or 12 weeks.

LEADING THE DAY

2.4 million more file new jobless claims: Another 2.4 million Americans filed new claims for unemployment insurance last week as the U.S. suffers through the highest level of joblessness since the Great Depression, according to data released Thursday by the Labor Department.

  • Between May 10 and 16, the total number of seasonally adjusted initial applications for jobless benefits totaled 2,438,000, a 249,000-claim decrease from the previous week’s revised total of 2,548,000 claims. The new wave of applications brings the total number of initial unemployment claims since the week ending March 22 to 38.6 million.
  • The non-seasonally adjusted number of claims in the week ending May 16 totaled 2,174,329, down 182,265 claims from the previous week. Some economists argue that the non-seasonally adjusted figure better reflects the scale of the damage wrought by the coronavirus pandemic.
  • Thirty-five states also reported 2,226,921 initial claims for Pandemic Unemployment Assistance, an expanded benefits program for workers who lost their jobs because of the coronavirus outbreak but do not qualify for unemployment insurance.

I have more here.

Top bank regulator announces abrupt resignation: Comptroller of the Currency Joseph Otting announced his resignation Thursday, vacating his perch at a powerful bank regulator as the pandemic-driven economic collapse threatens the financial system.

The Office of the Comptroller of the Currency (OCC) said in a statement that Otting would leave the agency on May 29, just more than halfway through his five-year term at the independent bank regulator. 

Sudden departure: 

  • Otting’s announcement comes two days after several media outlets reported his plans to resign and one day after breaking from two other bank regulators to release new rules for how banks should comply with the Community Reinvestment Act, a 1977 anti-redlining law. 
  • Neither the comptroller nor the OCC have explained why Otting is stepping down, particularly as banks brace for widespread business closures, bankruptcies, foreclosures and loan losses that could threaten their ability to lend and roil the financial system.
  • Federal bank regulators and industry advocates say that while the U.S. banks are well capitalized and should be able to weather the downturn, weak points elsewhere in the financial system could cause broader issues.

I have more on Otting’s decision here.

GOOD TO KNOW

  • Stocks dipped Thursday, adding to a volatile trading week that saw major swings in equity prices.
  • Delinquencies on home mortgages spiked by a record amount last month.
  • Politico: “California state lawmakers unleashed their frustrations about the state’s unemployment system Thursday, demanding answers from an agency director about the problems their jobless constituents have endured trying to access the financial lifeline during the pandemic.”
  • IMF Managing Director Kristalina Georgieva calls on banks to halt dividends and buybacks
  • Millions of student loan borrowers sued five of the nation’s largest financial companies, alleging they damaged borrowers’ credit and mishandled CARES Act pandemic relief.
  • The U.S. Chamber of Commerce, one of the country’s biggest business lobbying groups, said that it expects Congress will be able to wrap up work on its next coronavirus relief bill by Independence Day.
  • The Trump Organization has notified Florida state authorities of plans to lay off dozens of workers who were previously furloughed as a result of the ongoing coronavirus pandemic.
  • Sens. Amy Klobuchar (D-Minn.) and Jerry Moran (R-Kan.) on Thursday introduced legislation to protect senior citizens from coronavirus-related scams.
Tags Amy Klobuchar Bob Cusack Jerry Moran Mitch McConnell Steven Mnuchin

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