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This week’s main event for bank lobbyists is a Capitol Hill clash among conservatives over how to protect gun sellers, oil and gas producers and cryptocurrency startups.
The dispute is threatening to doom cannabis banking legislation on the eve of an historic vote Wednesday at the Senate Banking Committee.
The ideological fight among Republicans isn’t really about cannabis, even though the bill at the center of the feud is ostensibly about giving banks legal cover to serve the marijuana industry. It’s about a largely unrelated provision tucked into the bill that would stop bank regulators from forcing lenders to shut down the accounts of customers that pose “reputational risk.”
Lawmakers have included the measure in various iterations of the cannabis banking legislation for years. The political motivation has been that it attracts Republicans who may not support marijuana legalization but are eager to show that they’re fighting to protect certain businesses from any heightened scrutiny during Democratic administrations. That’s where the guns, oil and crypto come into play.
Republicans are scrambling to tamp down internal dissent over what was supposed to be a conservative sop after senators watered down the account closure restrictions. The compromise was an attempt to allay concerns from Democrats, regulators and public interest groups that it would tie the hands of the banking agencies to police financial crime.
Our Natalie Fertig and Eleanor Mueller have scooped in recent days how the change is threatening to weigh on Senate GOP support for the bill and may shatter any chance it has of being blessed by senior House Republicans.
“As it’s currently written, it is dead on arrival in the House,” says Rep. Blaine Luetkemeyer (R-Mo.), an early architect of the account closure restrictions. He argues that the latest version “throws out carefully crafted bipartisan work and crams in gross overreach to potentially crush industries not in line with the president’s agenda.”
What’s next? Tune in to Natalie’s live interview with Sen. Kevin Cramer (R-N.D.), a co-sponsor of the bill, at 3:45 p.m. ET today.
Happy Tuesday — Would the cannabis banking bill really make a difference for lenders or the weed industry? We’d love to hear your take on why this matters — or not. Let us know: Zach Warmbrodt, Sam Sutton.
President Joe Biden will join the United Auto Workers picket line in Michigan … The S&P Case-Shiller home price index will be out at 9 a.m. … The Peterson Institute releases its semiannual forecast for the U.S. and global economies at 11 a.m. … Fed board member Michelle Bowman speaks at a FedCommunities housing event at 1:30 p.m.
Moody’s scolds U.S. on shutdown risk — Sam Sutton reports that Moody’s has put Washington on notice that a shutdown could harm the government’s credit rating and make it more expensive to borrow money. Moody’s cites “the weakness of U.S. institutional and governance strength.”
White House NEC Director Lael Brainard responds: “Today’s statement from Moody’s underscores that a Republican shutdown would be reckless, create completely unnecessary risks for our economy, and lead to disruptions for communities and families across the country. Congress must do its job and keep the government open.”
Our Huddle colleagues can fill you in on what to expect from the emerging Senate plan to keep the government open: “Short — think around four to six weeks — and pretty darn clean.”
Menendez banking fallout — Banking Committee Chair Sherrod Brown became the second Democratic senator to call on Sen. Bob Menendez to resign following his indictment on corruption charges. The committee postponed a flood insurance hearing that Menendez was set to chair Wednesday. Menendez says he will be exonerated and will not resign.
Will the SEC follow California? — Corporate climate disclosure legislation awaiting Gov. Gavin Newsom’s signature may clear a path for the SEC to finalize its own greenhouse gas transparency rules, Jordan Wolman and Declan Harty report. The reason is that California’s move potentially slashes the cost burden and legal risk of a federal rule, according to securities lawyers, former agency officials and analysts.
Raimondo taps Wall Street vets — Bloomberg reports that Commerce Secretary Gina Raimondo has assembled a team including former executives from Goldman Sachs and KKR to divvy up $100 billion in subsidies and loan guarantees to bolster U.S. chip manufacturing.
A primer on student loan repayments — Our Michael Stratford has a quick guide on the upcoming return of federal student loan payments after more than three years of a pandemic pause.
You might be paying for a Russian yacht — The WSJ has a look at the costs — often imposed on taxpayers — of maintaining the yachts and mansions of Russian oligarchs targeted by sanctions.
“Our problems are the yachts,” said an Italian official. “If the war continues … the running costs could potentially exceed their actual value.”
The oligarch’s view — Oleg Deripaska, one of Russia’s richest men, told the FT that he’s been surprised at how well the country has been able to weather sanctions.
“I was surprised that private business would be so flexible,” he said. “I was more or less sure that up to 30 percent of the economy would collapse, but it was way less.”
SEC assembles trove of trader chats — Reuters reports that the SEC has collected thousands of staff messages from more than a dozen major investment firms, as part of a probe into Wall Street’s use of private messaging apps.
Sustainable buildings face flood risks — Corbin Hiar with POLITICO’s E&E News reports that more than 800 new LEED-certified buildings are in extreme danger of flooding.
Tokens and tapas — Coindesk reports that the U.S.-based crypto exchange operator has registered with the central bank of Spain to provide exchange and custody services in the country.
