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Elections – Page 2 – Wall Street Observer

Wall Street Observer

Wall Street Observer

Analysis: Congressional Democrats face challenges in repealing Wall Street-friendly rules

By Pete Schroeder and Michelle Price

WASHINGTON (Reuters) – With Democrats controlling the Senate, progressives want to repeal the Trump administration’s Wall Street-friendly rules, but they may struggle to win enough votes in a thinly divided Congress and risk obstructing President Joe Biden’s agencies from writing stricter new rules, said lobbyists and legal experts.

Sherrod Brown, expected chair of the Senate Banking Committee, said this month he was drawing up a list of rules passed by Trump regulators that he hopes to kill using the Congressional Review Act (CRA), a 1996 law that allows Congress to reverse recently finalized federal regulations.

Since 2017, regulators have eased dozens of rules created following the 2009 financial crisis and in the decades before, arguing they were outdated and stymied economic growth. Liberals say the changes saved Wall Street tens of billions of dollars while increasing systemic risks and hurting consumers.

Reversing rules through an agency’s internal process can take years whereas the CRA allows Congress to swiftly kill rules with a simple majority and the president’s approval.

Democrats, who already led the House of Representatives, on Wednesday took working control of the Senate, with Vice President Kamala Harris holding a tie-breaking vote.

But with such a wafer-thin margin, Brown may struggle to win vital support from moderate Democrats, especially from those whom have publicly supported similar rule-changes in the past.

Several centrists, for example, voted for a 2018 law easing post-crisis banking rules and have backed bills containing rules similar to those implemented in 2020 by the securities regulator which critics say muzzle shareholders.

“It’s a lot harder than people think to get something changed via the Congressional Review Act, particularly with thin majorities,” said Paul Merski, an executive at the Independent Community Bankers of Americas who lobbied in 2017 to reverse a rule banning forced arbitration via the CRA.

Issues related to bank capital requirements and liquidity may be too arcane to compete for limited Senate floor time with healthcare, labor and immigration measures, said Gregg Gelzinis, a senior policy analyst at liberal Washington think tank the Center for American Progress, which is discussing CRA issues with lawmakers.

“That education process is underway now to feel out which of these rules can get unanimous support in the caucus,” he said.

Potential candidates could include a December rule relaxation that allows banks to hold more risky deposits, and a rule which could force banks to lend to contentious sectors, such as fossil fuel companies, said Gelzinis. See FACTBOX.

Brown’s office said it will consult with Biden’s new regulators on which rules the agencies can fix and which would require congressional action. His office did not identify specific rules, but flagged those which “gutted fair housing protections, undermined state consumer protection laws, and threatened” financial stability.

Cam Fine, a seasoned lobbyist and CEO of Washington consultancy Calvert Advisors, said recent consumer finance rules which progressives say do more harm than good would be savvy political targets, as Democrats generally agree on the need to boost consumer protections.

“Brown would be more successful if he employed the CRA on consumer-focused issues – I think that’s where he could unite his caucus,” he added.


The CRA allows a new Congress to reverse rules passed during the final 60 working days of the previous Congress.

Before Trump took office pledging to slash red tape, the CRA had been used successfully once. Republicans subsequently used it to reverse 16 rules created by Barack Obama administration regulators, according to Daniel Perez, senior policy analyst at George Washington University’s Regulatory Studies Center.

Democrats, however, have never successfully used the CRA, according to Perez, and may veer into novel legal territory where their ultimate goal is to make rules tougher rather than scrap them. That’s because once a rule is reversed using the CRA, agencies cannot write a “substantially” similar rule.

While that is a vague provision that has never been tested, agencies have generally avoided revisiting rules Congress has overturned, said Perez.

“Where perhaps Democrats might want to do something more stringent, I think that might give them pause,” he said.

Navigating this provision is part of the discussions, said Gelzinis. Progressives may want to rewrite some rules but could risk legal challenges arguing the rule is substantially similar.

“The overall guiding principle here is what is the most efficient way to undo this universe of Trump harms,” he said.

(Reporting by Pete Schroeder and Michelle Price; Additional reporting by Katanga Johnson; Editing by Andrea Ricci)


Bridgewater’s Dalio sees U.S. divided, in ‘terrible financial state’

(Reuters) – Bridgewater Associates founder Ray Dalio wrote on Twitter on Sunday that the United States is still in a “terrible financial state” and remains “terribly divided”, but added he liked what he heard from President Joe Biden at his inauguration.

The hedge fund billionaire wrote that the question was whether the president and both parties in Congress would work together “for peace and prosperity that addresses the big wealth, values, and opportunity gaps we’re now seeing.”

Dalio has previously criticized https://www.reuters.com/article/us-usa-wallstreet-dalio/u-s-income-inequality-a-national-emergency-billionaire-ray-dalio-idUSKCN1RG2VU a widening wealth gap and under-investment in public education in the United States, which he has linked to lower high school graduation rates, greater disparity in test scores, and lower teacher pay.

(Reporting by Kanishka Singh in Bengaluru; Editing by Daniel Wallis)


Yellen nomination sails through Senate panel; final vote set for Monday

By David Lawder and Andrea Shalal

WASHINGTON (Reuters) – The U.S. Senate Finance Committee on Friday unanimously approved Janet Yellen’s nomination as the first woman Treasury secretary, indicating that she will easily win full Senate approval, but Republicans called for her to work with them in developing economic policies.

The full Senate will vote on Yellen’s nomination on Monday, Senate Majority Leader Chuck Schumer said on the Senate floor late Friday, which would allow her to get to work promptly on President Joe Biden’s economic agenda.

Her nomination was approved 26-0 in the evenly split committee, with concerns expressed by Republicans about Biden’s ambitious plans for massive coronavirus relief spending, infrastructure investment and tax hikes failing to sway them against the former Federal Reserve chair.

“I have very strong disagreements with Dr. Yellen on a number of her positions, particularly in the tax policy arena, but she has committed to us that she will work with us,” Republican Senator Mike Crapo said after the vote.

“And I think the strong vote on our side to support her today is an indication that we want to engage.”

Biden has proposed a $1.9 trillion coronavirus relief plan and has pledged to invest https://www.reuters.com/article/us-usa-election-biden/biden-climate-plan-would-spend-2-trillion-in-bid-to-boost-economy-idUSKCN24F20 $2 trillion in infrastructure, green energy projects, education and research to boost American competitiveness.

At Yellen’s confirmation hearing before the committee on Tuesday, Republicans expressed concerns over the price tag and increased debt in a return to fiscal conservatism after running up deficits with the 2017 tax cuts and nearly $5 trillion in coronavirus spending last year under former Republican President Donald Trump.

“I can tell you, a lot of times I don’t think you could get a 26-to-nothing vote to agree to buy a soda,” said Democrat Ron Wyden, who will soon become Senate Finance Committee chairman. “So, this is an indication that she is really an NBA All-Star when it comes to Senate confirmation.”

A full confirmation vote just days after Biden took office would put the 74-year-old PhD economist and daughter of a Brooklyn, New York, family doctor quickly to work on a deep economic crisis sparked by the coronavirus pandemic. She broke a similar gender barrier when she became Fed chair in 2014, a role she held until 2018.

Yellen’s Republican predecessor, Steven Mnuchin, was not confirmed until three weeks after Trump’s 2017 inauguration on a party-line vote.


Yellen’s confirmation hearing on Tuesday highlighted some Republican lawmakers’ concerns about her role in executing Biden’s economic policies, including a bigger federal debt burden and repealing parts of their signature 2017 tax cuts.

Yellen told senators they needed to “act big” on the proposed $1.9 trillion stimulus package or risk a longer recession and long-term economic scarring, job and revenue losses.

Her remarks represent a new attitude toward government debt among some economists and policymakers: Focus on the interest rate being paid and the returns it will generate, rather than the overall amount borrowed. In recent months, Treasury’s interest outlays have fallen from pre-pandemic levels due to lower rates.

In written answers to senators’ questions, Yellen said she would study raising tax rates for “pass-through” small businesses including sole proprietorships, imposing a new minimum corporate tax and raising capital gains taxes on the wealthy. She also endorsed an effective carbon pricing system and financial regulation to combat systemic risks from climate change.

With Yellen still awaiting confirmation, the Biden administration on Wednesday named Andy Baukol, a longtime career international finance official, as acting Treasury secretary. A confirmation hearing for Deputy Treasury Secretary nominee Wally Adeyemo has not yet been scheduled.

(Reporting by David Lawder and Andrea Shalal; Additional reporting by Alexandra Alper; Editing by Heather Timmons, Alistair Bell, Andrea Ricci and Sonya Hepinstall)


Amazon seeks to halt union election at Alabama warehouse

(Reuters) – Amazon.com Inc has filed a motion asking the U.S. National Labor Relations Board to halt the union election at its Bessemer, Alabama warehouse, scheduled to start Feb. 8.

The company also requested a review of an earlier labor board decision to hold the election by mail due to the COVID-19 pandemic, according to a filing dated Jan. 21.

Amazon’s first U.S. union election since 2014 was scheduled https://www.reuters.com/article/us-amazon-com-labor/amazon-union-election-to-start-in-february-u-s-labor-board-idUSKBN29K2BV to begin with the mailing of ballots in early February and a vote count starting March 30. The online retail giant, which is the second-largest private employer in the United States after Walmart Inc, has long avoided unionization and has trained managers to spot organizing activity.

The company alleged multiple gaps in labor board precedent, errors made by the acting regional director, and missed opportunities for mail-ballot improvements to back its motion.

The union declined to comment on the matter.

(Reporting by Ayanti Bera in Bengaluru; Editing by Vinay Dwivedi)


Silicon Valley CEOs cannot lay down the law, EU chief says

BRUSSELS (Reuters) – The European Union’s chief executive hailed on Wednesday as a new dawn Joe Biden’s term as U.S. president but warned that the bloc would strive to regulate American technology companies, calling for global standards.

“After four long years, Europe has a friend in the White House,” Commission President Ursula von der Leyen said, who welcomed outgoing President Donald Trump’s ban on Twitter.

But she added: “This kind of decision must be taken in accordance with laws and rules …not by an arbitrary decision in the power of Silicon Valley CEOs.”

(Reporting by Robin Emmott)


Outlook darkens for Wall Street as Biden’s regulators take shape

By Michelle Price

WASHINGTON (Reuters) – Wall Street may be facing an uncomfortable four years after President-elect Joe Biden’s team confirmed on Monday it planned to nominate two consumer champions to lead top financial agencies, signaling a tougher stance on the industry than many had anticipated.

Gary Gensler will serve as chair of the Securities and Exchange Commission (SEC) and Federal Trade Commission member Rohit Chopra will head the Consumer Financial Protection Bureau (CFPB). Progressives see the agencies as critical to advancing policy priorities on climate change and social justice.

Wall Street-friendly Republicans on Monday criticized Biden for bowing to leftists, warning the picks would be divisive.

“The Biden team is pandering to members of the far-left,” Patrick McHenry, lead Republican on the House of Representatives finance panel said of Chopra, while warning Gensler should “resist pressure to commandeer our securities disclosure regime to try to fix non-economic issues or social problems.”

The chair of the derivatives regulator from 2009 to 2014, Gensler implemented new swaps trading rules created by Congress after the financial crisis, developing a reputation as a tough operator willing to stand up to powerful Wall Street interests.

Chopra helped set up the CFPB after the crisis and served as its first student loan ombudsman. At the FTC, he campaigned for tougher rules for big tech companies on consumer privacy and competition, and for stricter enforcement penalties.


With Republicans appearing to have a good chance to maintain control of the Senate following the Nov. 3 election, financial executives had hoped Biden would pursue more moderate picks. But Democratic victories in two Georgia run-off elections earlier this month mean Democrats will have effective control of the chamber once Biden and Vice President-elect Kamala Harris are sworn in on Wednesday.

Those wins also mean anti-Wall Street firebrand Sherrod Brown will lead the powerful Senate Banking Committee. He has said he plans to try to repeal Wall Street-friendly rules introduced by President Donald Trump’s regulators.

On Monday, Brown hailed Chopra as a “bold” choice who would ensure the CFPB “plays a leading role in combating racial inequities in our financial system,” while Gensler would “hold bad actors accountable” and put “working families first.”

Gensler is expected to pursue new corporate disclosures on climate change related-risks, political spending, and the composition and treatment of company workforces, and to complete post-crisis executive compensation curbs, among other rules.

Chopra is expected to review payday lending and debt-collection rules, which influential consumer groups say won’t protect Americans. They also hope he will stamp out exorbitant lending rates and abusive debt-collection practices, address the student debt burden and gaps in minorities’ access to credit.

“The CFPB has an incredibly important job to do, including stopping financial rip-offs,” said Lisa Donner, executive director at Americans for Financial Reform, a think tank. “It also has an urgent role to play in helping families survive and recover from the pandemic-induced economic crisis.”

Biden, though, will first have to fire Kathy Kraninger, the current CFPB director, a power he will have thanks to a ruling last year by the Supreme Court which said the CFPB director served at the president’s will.

But Richard Hunt, chief executive of the Consumer Bankers Association, rejected the idea that Biden should automatically use that power.

“CBA does not believe it is in the best interest of consumers to have a new Director with each change in Administration. This whip-saw effect will stifle innovation and prevent consistent regulations,” Hunt said in an usually forceful statement.

(Reporting by Michelle Price; Editing by Paul Simao)




Amazon union election to start in February, U.S. labor board says

By Jeffrey Dastin

(Reuters) – Amazon.com Inc’s first U.S. union election since 2014 is scheduled to begin with the mailing of ballots in early February and a vote count starting March 30, a U.S. labor board official said in a filing on Friday.

The announcement brings employees at Amazon’s fulfillment center in Bessemer, Alabama, a step closer to deciding whether to join part of the Retail, Wholesale and Department Store Union (RWDSU). A “yes” vote would mark the first-ever for a U.S. Amazon facility.

Unions have had greater success organizing at Amazon elsewhere, such as in France, where they precipitated a month-long closure of its warehouses last year.

As of Jan. 7, Amazon employed almost 6,200 hourly workers at the warehouse, according to the filing. To win, the union needs a simple majority of those who submit ballots.

While Amazon had preferred in-person voting, the labor board sided with the union on a mail-in procedure “because this is the safest and most appropriate method of conducting an election in view of the extraordinary circumstances presented by the COVID-19 pandemic,” the filing said.

America’s second-largest private employer after Walmart Inc, Amazon has long avoided unionization, and it has trained managers to spot organizing activity. A website, doitwithoutdues.com https://www.doitwithoutdues.com, warns the Bessemer employees, “why pay almost $500 in dues? We’ve got you covered* with high wages, health care, vision, and dental benefits.”

In statements, Amazon said the website’s purpose was to educate staff about “the facts of joining a union” and that “We will continue to insist on measures for a fair election.” The company added that its rejected proposal for an in-person election would improve “associate convenience, vote fidelity, and timeliness of vote count.”

The RWDSU declined to comment.

The world’s largest online retailer has faced criticism over its handling of the COVID-19 pandemic, prompting some workers to protest outside warehouses and demand their closure. Labor organizing has begun in different parts of the company.

Amazon, reporting more than 19,000 COVID-19 cases as of September, has said it increased cleaning, rolled out virus tests and temperature checks, and added other measures to protect associates.

Ballots will be mailed on Feb. 8, the board filing said.

(Reporting By Jeffrey Dastin in San Francisco; Editing by Chizu Nomiyama, Aurora Ellis and Nick Zieminski)