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Presented by Electronic Payments Coalition: Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy. | | | | |  | | By Zachary Warmbrodt and Jasper Goodman | | | Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our s each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.
| | Want to know if the cryptocurrency world really has sway in Washington? Keep an eye on Senate Banking Chair Sherrod Brown. The Ohio Democrat, who’s facing a tough reelection campaign that could determine control of the Senate, holds the digital asset industry’s fate in his hands at the moment. Policy decisions that could make crypto’s life hell or give it a new veneer of legitimacy are pending at his desk. Crypto executives are trying really hard to make it look like Brown should care about them. Leading the charge is the largest U.S. crypto exchange, Coinbase, which The Columbus Dispatch reports “is making a play for Ohio voters.” The company hosted a “Stand With Crypto” event in the state capital and has run ads urging voters to talk with their representatives. It recruited former Ohio Democratic Rep. Tim Ryan to serve on an advisory council (as well as Brown’s former Republican counterpart on Banking, Sen. Pat Toomey). “The Democrats need to see this as an opportunity to drive investment, help the environment and create good-paying union jobs,” Ryan told MM. He also now leads a nonpartisan pro-crypto policy group called the Blockchain Innovation Project. But Brown seems unmoved. The Hamas attack on Israel has ignited intense scrutiny of crypto’s role in terrorist financing, and Brown is leaning in. After initially dismissing crypto anti-money laundering legislation pushed by Sen. Elizabeth Warren, he joined her in urging the Biden administration to crack down, vowed to use his committee to investigate the potential risks and is now angling to work with his ranking member, Sen. Tim Scott, on bipartisan legislation. The industry is desperately trying to escape the Warren wave. At the same time, crypto lobbyists need Brown to sign off on what would be their biggest breakthrough ever: House legislation that would give the industry acceptance as a legitimate financial service — as opposed to just gambling — by enshrining it in federal banking, securities and commodities law. Based on Brown’s record on crypto — he argues that it’s a big threat to consumers — it’s hard to see him cutting any kind of deal that lets the House bills ride on must-pass legislation, like House Financial Services Chair Patrick McHenry would like him to do. Such a move would also drive a rift between Brown and his fellow finance industry watchdogs. Taken together, it’s evidence that the crypto industry still has a hard ceiling in terms of its political influence, even after dumping millions of dollars in Washington and across the country in a bid to get leverage beyond its minute economic impact. Brown told MM he isn’t worried about the industry trying to muddy his reelection. “I don’t care if they do,” he said. “They only serve to discredit themselves. These corporate interests are going to attack me for standing up to their illicit financing of terrorism and fentanyl? I mean, bring ’em on if that’s what they’re going to do.” It’s Thursday — MM wants to hear from you on the deficit. Is it a problem or not? What should Washington do about it? Send Zach your thoughts: zwarmbrodt@politico.com.
| | | | A message from Electronic Payments Coalition: Don’t Buy What Mega-Retailers Are Selling About Durbin 2.0: Superstores like Walmart, Target, and Home Depot are pushing for legislation that's essentially corporate welfare at the expense of consumers. They're seeking new government mandates on credit card routing, which may appear harmless but would jeopardize YOUR data security and fraud protection, rewards for everyday purchases, and the convenience of using credit cards. Congress: reject the Durbin credit card interchange bill. Click HERE to get the facts. | | | | | Former Maryland Gov. Martin O’Malley testifies before Senate Finance on his nomination as Social Security Commissioner at 10 a.m. … Senate Banking holds a hearing on protections for servicemembers and veterans at 10 a.m. … Treasury Secretary Janet Yellen will talk about the Biden administration’s economic approach toward the Indo-Pacific at an event hosted by the Asia Society Policy Institute at 1:30 p.m. … House Financial Services holds hearings on the SEC and insurance costs … Powell: A pause doesn’t mean done — The Federal Reserve kept rates steady Wednesday but Chair Jerome Powell sent a clear signal that future hikes aren’t off the table. As our Victoria Guida reports, Fed officials who met this week saw strong economic growth and solid job gains despite a year and a half of aggressive increases in borrowing costs. Powell said at a post-FOMC press conference that the central bank isn't confident yet that rates are cutting into growth enough to bring inflation back down to 2 percent, though they might be. And if Fed officials choose to stand pat in December, that doesn't necessarily mean they're done, either. “The idea it would be difficult to raise again after stopping for a meeting or two is just not right,” he said. Powell on capital — Victoria pressed Powell on the Fed’s proposed capital hikes for big banks and whether he’ll sign off on them without major changes. A host of interest groups and lawmakers have raised concerns with several aspects of the plan. The Fed is taking public comments until mid-January. “We'll take them seriously. We’ll read them,” he said of the public comments. “We’re a consensus-driven organization. We’ll come to a package that has broad support on the board.” (MM has reported that’s the message Powell is also giving lawmakers.) But, Victoria asked, does that mean he’s aiming to secure more votes than the proposal got in the first place? (Two Fed governors opposed issuing the draft rules, and it would likely take major revisions to win them over.) “It means broad support,” he said. (MM sidebar: This is obviously a dodge, but notably Powell has previously expressed reservations about the proposal. Broad support would, at a minimum, need to include him.) ‘Audit the Fed’ fails again — The Senate in a 46-51 vote rejected an amendment from Sen. Rand Paul that would subject the Fed to further GAO scrutiny, Eleanor Mueller reports. The Senate also blocked the Kentucky Republican’s proposal in 2016. Sens. Tammy Baldwin (D-Wis.), Bernie Sanders (I-Vt.) and Kyrsten Sinema (I-Ariz.) broke with Democrats to support it Wednesday. Sens. Pete Ricketts of Nebraska, Mitt Romney of Utah and Mike Rounds of South Dakota were the only Republicans to vote against. SBF’s lawyers wrap up — CoinDesk: “Sam Bankman-Fried appeared to be on the verge of tears late Wednesday at the end of his attorney Mark S. Cohen's closing remarks, the former FTX CEO's last, best hope for acquittal, or at least a hung jury.”
| | | | The World Strategic Forum (WSF) is taking place on November 6-7th in Miami, Florida at the Biltmore Hotel Coral Gables. WSF 2023 will discuss ‘Mastering the New Economy’, examining the ways in which business and society can thrive despite current economic and environmental challenges. The conference will gather 100+ speakers from companies including Volkswagen, Siemens and C3.ai, as well as U.S. Senator for Tennessee Bill Hagerty; Florida’s Chief Financial Officer Jimmy Patronis; Former President of Colombia Iván Duque Márquez and Former President of Ecuador Jamil Mahuad. Learn more and register now at www.worldstrategicforum.com. | | | | | | | | Tim Scott preps SEC plan — The Senate Banking ranking member is kickstarting work on legislation to revamp capital markets rules and ratchet up oversight of the SEC. The South Carolina Republican’s framework for potential legislation would “streamline and modernize the rules governing capital raises for public and private markets.” The goal, according to the document, is to help entrepreneurs, small businesses and newly public companies access funding. The plan would also have the SEC chair testify on a semi-annual basis and “statutorily require the SEC to perform thorough rulemaking cost-benefit analysis.” Inside Mike Johnson’s finances — The Daily Beast reports that since 2016 the new speaker “has never reported a checking or savings account in his name, nor in the name of his wife or any of his children.” Johnson probably has a bank account but may not have enough cash to trigger disclosure requirements.
| | | | A message from Electronic Payments Coalition:   | | | | | Treasury wants insurer climate data — The Treasury Department revealed a new proposal for gathering climate-risk information from property insurers. Treasury is facing industry resistance, Jasper reports. Jimi Grande, senior vice president at the National Association of Mutual Insurance Companies, said the plan would require "tens of thousands of hours and millions of dollars to provide a federal financial agency with information that is – at best – tangentially related to climate change impacts.” He added that "the insurance industry and its functional state regulators have a deep understanding of our changing climate and have been adapting and adjusting to this new threat for more than a decade." The National Association of Insurance Commissioners, which has announced its own plans to collect climate data, said in a statement that the NAIC and state insurance regulators "are uniquely positioned to best understand the challenges that both consumers and the insurance industry face as natural perils persist across our nation.”
| | First in MM: Treasury office gets a makeover — In 2021, Treasury created a temporary office dedicated to putting out aid under various coronavirus relief programs and tracking it. Now that relief is fading (and poverty rates are rising), Victoria reports that the Office of Recovery Programs will become the Office of Capital Access, designed to facilitate investments in rural areas, small cities and other places in need. It will continue to be led by Jessica Milano. Deputy Treasury Secretary Wally Adeyemo told MM the office helped deliver “the most equitable economic recovery in history” and called investing in underserved communities “one of the best ways to spur strong and sustainable economic growth that benefits all Americans.” MM first look: A new report on the Covid recovery — The Center for American Progress is out with a report looking at why the labor market bounced back so quickly after the pandemic recession.
| | | | PLAYBOOK IS GOING GLOBAL! We’re excited to introduce Global Playbook, POLITICO’s premier newsletter that brings you inside the most important conversations at the most influential events in the world. From the buzzy echoes emanating from the snowy peaks at the WEF in Davos to the discussions and personalities at Milken Global in Beverly Hills, to the heart of diplomacy at UNGA in New York City – author Suzanne Lynch brings it all to your fingertips. Experience the elite. Witness the influential. And never miss a global beat. BE PART OF THE CONVERSATION. SUBSCRIBE NOW. | | | | | | | | | CFTC sued over election betting — Kalshi, a prediction market operator, sued the CFTC after it rejected the company’s bid to let Americans wager on U.S. elections, Declan Harty reports. In other legal news, a federal appeals court gave the SEC one month to rework a stock buyback disclosure rule challenged by the U.S. Chamber of Commerce. SBA approves new lenders – The SBA approved Small Business Lending Company licenses for Funding Circle, Arkansas Capital Corporation and Alaska Growth Capital BIDCO in the first expansion of the program in more than 40 years. It’s worth watching congressional oversight of the move, after lawmakers on both sides of the article warned the agency about the revamp.
| | | | A message from Electronic Payments Coalition: Don’t Buy What Mega-Retailers Are Selling About Durbin 2.0:
FACT: Consumers Will Not See Any Savings from Credit Card Routing Mandates
Credit card routing mandates would not lower the cost of goods for consumers, and in some cases, may raise costs for consumers. Proponents of the 2010 Durbin Amendment, which regulated debit routing and capped debit interchange, argued that merchants would pass along the savings. However, the Federal Reserve of Richmond found 98% of merchants either increased prices or kept them the same. There is no evidence to suggest that Durbin 2.0 would be any different.
Congress: reject the Durbin credit card interchange bill. Click HERE to get the facts. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |  |
