Fed Vice Chair Philip Jefferson gives a virtual keynote to the Conference on Global Risk, Uncertainty and Volatility at 5:30 a.m. … Bank regulators testify at Senate Banking at 10 a.m. … House Financial Services marks up sanctions bills at 10 a.m. First in MM: Credit card bill wins union backing — The International Brotherhood of Teamsters and the Service Employees International Union are endorsing legislation from Sens. Dick Durbin and Roger Marshall aimed at cracking down on credit card fees. Teamsters general president Sean O’Brien said in a statement that it would “ease inflationary pressures on working people and establish greater accountability in the financial market.” Big day for big banks (and their regulators) — Top officials from the Fed, FDIC and OCC will kick off two days of Hill testimony this morning. At the top of the agenda will be their plans to hike capital requirements for the largest banks. As MM has previewed the last few days, lawmakers from both sides of the aisle are expected to warn regulators that they’re going too far. So far, bank executives are encouraged by the political response that their lobbying efforts have triggered. They’ll be watching the Senate and House hearings to see how it manifests when lawmakers confront regulators face to face. This week, the Financial Services Forum, which represents eight of the largest U.S. banks, will launch national TV ads warning about the potential costs of the rules. The campaign is dubbed "Another Bill Americans Can't Afford.” A big question heading into the hearings is how many Democrats will speak out in support of the regulators' efforts. Lawmakers are facing a lobbying barrage warning about the impacts on business and consumer lending, mortgages and broader economic growth. Senate Banking Chair Sherrod Brown will kick off his hearing this morning by arguing that heightened regulation is justified after the three major bank failures the U.S. suffered earlier this year. “That means improving bank supervision and holding bank executives accountable for risky behavior that drives their banks into the ground,” he’ll say, according to prepared remarks. “And it means strengthening rules, so that banks are serving their communities and have the capital necessary to continue serving them … during stress events.” What regulators will say — Fed Vice Chair for Supervision Michael Barr, a lead architect of the capital proposal, will tell Senate Banking that “we are interested in public input.” “We have already heard concerns that the proposed risk-based capital treatment for mortgage lending, tax credit investments, trading activities and operational risk might overestimate the risk of these activities,” he said. The rest of the officials’ prepared testimony is available here. Another hearing target — Lawmakers may also ask about Monday’s WSJ bombshell that detailed the FDIC’s “toxic work environment” — one that has reportedly caused employees to flee the agency for years. More Treasury market ransomware fallout — Bloomberg reports that the Industrial and Commercial Bank of China is racing to reassure market participants following a ransomware attack that left it unable to process Treasury trades. The firm has yet to restore normal operations.
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