News

Trump ‘Strongly’ Favors Imposing Online Sales Tax, Mnuchin Says - ABI

Treasury Secretary Steven Mnuchin said yesterday that President Donald Trump “feels strongly” that the U.S. should impose a sales tax on purchases made over the Internet, Bloomberg News reported. Mnuchin, speaking at a hearing before the House Ways and Means Committee, said that he has spoken personally with Trump about the issue, and that the president “does feel strongly” that the tax should be applied. The prospect of an online sales tax has been a long-standing point of contention between Internet-based retailers and their brick-and-mortar rivals. Trump has previously gone after Internet giant Amazon.com Inc., saying that last year that it does “great damage to tax paying retailers.” Amazon began collecting sales taxes on purchases in all states that levy them earlier last year, despite an exemption that allows online retailers to avoid collecting them in places where they don’t have a physical presence. But Amazon still avoids charging shoppers sales taxes when they buy from one of its third-party vendors — sales that make up about half the company’s volume.


Congress Sets Sights on Federal Cryptocurrency Rules - ABI

Jolted by the global investment craze over bitcoin and other cryptocurrencies, U.S. lawmakers are moving to consider new rules that could impose stricter federal oversight on the emerging asset class, Reuters reported. Bipartisan momentum is growing in the Senate and House of Representatives for action to address the risks posed by virtual currencies to investors and the financial system. “There’s no question about the fact that there is a need for a regulatory framework,” said Republican Sen. Mike Rounds (R-S.D.). Digital assets currently fall into a jurisdictional gray area between the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Treasury Department, the Federal Reserve and individual states. Much of the concern on Capitol Hill is focused on speculative trading and investing in cryptocurrencies, leading some lawmakers to push for digital assets to be regulated as securities and subject to the SEC’s investor protection rules.


Fannie Needs First U.S. Aid Since 2012 After Tax-Cut Loss - ABI

Fannie Mae will request an infusion of taxpayer money for the first time since 2012 because of an unintended but anticipated side effect of the corporate tax cut signed into law in December, Bloomberg News reported. The mortgage-finance company, which reported fourth-quarter and full-year financial results yesterday, said that it will need to draw $3.7 billion from the U.S. Treasury in March to keep its net worth from going negative. The deficit was driven by a $6.5 billion loss in the fourth quarter, which came as a result of a drop in the value of assets Fannie can use to offset taxes. The assets became less valuable when Congress cut the corporate tax rate, resulting in a $9.9 billion hit.


CFPB Chief Says Equifax Probe Continues - ABI

A federal consumer-finance regulator’s probe of the data breach at Equifax Inc. hasn’t changed since the Trump administration took over the agency, the interim head of the agency said Tuesday, dismissing a report suggesting that it had pulled back from the investigation, the Wall Street Journal reported. “I can tell you, senator, there has been no change in the position from the previous leadership of the CFPB regarding Equifax,” Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, said at a Senate Budget Committee hearing. Mulvaney, who also serves as the White House budget chief, was addressing a lawmakers at a hearing on a Trump administration budget proposal released on Monday. More than 30 Democratic senators sent a letter last week to Mulvaney about the Equifax investigation, following a news report that the CFPB may have halted its probe of the Equifax hack, which compromised personal data of 145.5 million Americans.


Total U.S. Household Debt Soars to Record Above $13 Trillion - ABI

Total household debt rose by $193 billion to an all-time high of $13.15 trillion at year-end 2017 from the previous quarter, according to the Federal Reserve Bank of New York's Center for Microeconomic Data, Bloomberg News reported. Mortgage debt balances rose the most in the December quarter rising by $139 billion to $8.88 trillion from the previous quarter. Credit card debt had the second largest increase of $26 billion to a total of $834 billion. The report said it was fifth consecutive year of annual household debt growth with increases in the mortgage, student, auto and credit card categories.


White House Budget Plan Proposes Cutting CFPB Budget, Restricting Enforcement Powers - ABI

The White House yesterday proposed a major restructuring of the Consumer Financial Protection Bureau (CFPB) that would significantly cut the watchdog agency’s budget and limit its enforcement power, the Washington Post reported. Under the proposal, included in President Trump’s 2019 budget plan, the CFPB would be funded through Congress rather than the Federal Reserve, giving lawmakers more influence over the agency’s priorities. The CFPB’s 2019 budget would also be capped at its 2015 level, $485 million, compared with a projected $630 million this year. The plan, which would take two years to implement, also calls for putting restrictions on the CFPB’s enforcement authority.


CFPB Under Mulvaney Will Go ‘No Further’ Than Meeting Its Statutory Responsibilities - ABI

A revised strategic plan that the Consumer Financial Protection Bureau expects to release in the coming days says the agency, led by Acting Director Mick Mulvaney, intends to go “no further” than the requirements stipulated in the Dodd-Frank Act when it comes to regulating the financial industry, MorningConsult.com reported. Kirsten Sutton Mork, who’s chief of staff at the CFPB, wrote in an email sent to all agency employees that the CFPB plans to publish its updated strategic plan by Feb. 12. “If there is one way to summarize the strategic changes occurring at the Bureau, it is this: we have committed to fulfill the Bureau’s statutory responsibilities, but go no further,” she wrote. The new mission statement for fiscal years 2018-2022 borrows language from the 2010 Dodd-Frank language that established the agency, saying that the CFPB’s goal is “to regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws and to educate and empower consumers to make better informed financial decisions,” according to the email.


Government Shutdown Set to End as House Passes Sweeping Budget Bill - ABI

Congress moved to end a five-hour government shutdown early Friday morning after the House voted to support a massive bipartisan budget deal that stands to add hundreds of billions of dollars in federal spending on the military, domestic programs and disaster relief, the Washington Post reported. The 240-to-186 House vote gaveled to a close just after 5:30 a.m., nearly four hours after the Senate cleared the legislation on a vote of 71 to 28, with wide bipartisan support. But action did not come soon enough to avoid a brief government shutdown — the second in three weeks — as Sen. Rand Paul (R-Ky.) delayed the Senate vote past midnight to mark his opposition to an estimated $320 billion addition to the federal budget deficit. President Trump is expected to sign the bill later today to officially end the shutdown.


U.S. Threatens to Dump Lenders From Veterans Mortgage Program - ABI

Nine lenders have been warned by the U.S. that they will be kicked out of a top mortgage program within months unless they find ways to stop costly rapid refinances of veterans’ loans, Bloomberg News reported. The warnings stem from a probe by Ginnie Mae, a government-owned corporation that makes mortgages cheaper by protecting bond investors against homeowner defaults. Ginnie Mae guarantees about $2 trillion in bonds containing loans backed by agencies including the Department of Veterans Affairs. Some lenders have boosted their revenue through repeated, unneeded refinancing of veterans’ home loans, according to regulators. That process, called “churning,” lowers prices investors are willing to pay for bonds, effectively raising rates for veterans, first-time home buyers and others whose loans are included in Ginnie Mae-backed securities.


Treasury’s Mnuchin Says He Wants Answers on Equifax Breach - ABI

U.S. Treasury Secretary Steven Mnuchin said yesterday that he wants to know how the Consumer Financial Protection Bureau is handling a probe into a hack of credit bureau Equifax Inc. after a report that the agency’s chief has pulled back from investigating the matter, Reuters reported. Equifax disclosed in September that hackers had stolen personal data it had collected on some 143 million Americans. On Monday, Reuters reported that the acting chief of the Consumer Financial Protection Bureau (CFPB), Mick Mulvaney, had put the brakes on the agency’s Equifax investigation. “I haven’t spoken to Director Mulvaney about it but I will,” Mnuchin told the House of Representatives Financial Services Committee. “It is something I am going to discuss with him.” The CFPB said yesterday that it was examining the Equifax breach but declined to give details.