What to Know in Washington: Schumer Wants Bill Targeting Banks

Senate Majority Leader Chuck Schumer is pushing for bipartisan legislation to address the collapse of Silicon Valley Bank and Signature Bank, rather than endorsing a Democratic plan that would roll back a 2018 banking deregulation law.

“We need strong legislation and hopefully we can put something together that’s bipartisan,” Schumer (D-N.Y.) told reporters after a weekly closed-door meeting of all Senate Democrats.

Photographer: Al Drago/Bloomberg

Schumer speaks during a news conference at the US Capitol in Washington, D.C. on Wednesday.

Sen. Elizabeth Warren (D-Mass.) introduced a bill to repeal the Trump-era changes to regulations on mid-size banks. That 2018 law boosted to $250 billion in assets from a $50 billion threshold at which banks are subjected to strict stress tests and other provisions of the 2010 Dodd Frank Act.

All Senate Republicans backed the deregulation measure in 2018, and no GOP senator supports Warren’s legislation. Sen. John Thune (S.D.), the No. 2 GOP leader, said Republicans are focused on why regulators missed SVB’s liquidity problems leading up to its collapse in recent days.

“How come they were asleep at the switch and didn’t see this coming?” Thune asked of the regulators. Laura Litvan has the latest from congressional leaders.

Populists on both sides of the partisan divide in Washington can agree on one thing: They don’t like last weekend’s rescue of SVB depositors and want to prevent anything like it from happening again. The unity among populist lawmakers is unlikely to produce much lawmaking this time around, but if the contagion spreads, the backlash suggests strong resistance in Congress to any further intervention. Mike Dorning polls the populists.

• Treasury Secretary Janet Yellen plans to tell Congress on Thursday that the US banking system remains sound, seeking to reassure lawmakers, depositors and investors before taking what are likely to be tough questions about how the sector is regulated. Viktoria Dendrinou previews her testimony.
• Warren blasted Federal Reserve Chair Jerome Powell for “an astonishing list of failures” that contributed to the collapse of Silicon Valley Bank and Signature Bank in a letter to the Fed chief Wednesday. Catarina Saraiva has the letter.
• Powell faces growing calls from key lawmakers and regulatory experts for an independent investigation into the collapse, not just an internal review by the Fed board. “One hundred percent needs to be an outside look at it,” said Sen. Jon Tester (Mont.), a senior Democrat on the Banking Committee, which has Fed oversight authority. Craig Torres, Steven T. Dennis and Litvan round up the calls.
• Democrats introduced legislation to let regulators recoup executive bonuses and stock sales of failed financial institutions, Michael Bruning reports.

Happening on the Hill

CONGRESS’ SCHEDULE

• The Senate meets at 10 a.m. to vote on a nomination and a measure to repeal military force authorization against Iraq.

Wealthy Should Draw Focus of Stronger IRS, Senate Democrats Say

The Internal Revenue Service should focus new audits solely on large corporations and households earning more than $400,000 annually, Warren and 24 other Democrats told the agency.

GOP IRS Whistleblower Portal Makes Some Advocates Uneasy

Treasury Secretary Janet Yellen pledged to House Ways and Means Committee Republicans she would share details of a committee-run whistleblower portal for IRS employees, but some say making agency employees comfortable reporting misdeeds isn’t as simple as sending a link.

US Senators See Security Threat from DJI, Ask Renewed Assessment

Sixteen senators asked security officials to assess possible threats posed by SZ DJI Technology drones, saying the widely used devices could be used to inform Chinese officials about critical infrastructure such as pipelines, railways and power stations.

Ex-LA Mayor Garcetti Prevails to Become US Ambassador to India

Former Los Angeles Mayor Eric Garcetti won a vote in the Senate to become ambassador to India after his nomination was delayed almost two years over concerns he mishandled a sexual harassment case during his time in office.

Elections, Politics & Probes

DOJ Told Court to Expect a Deluge of New Jan. 6 Prosecutions

More than 1,000 additional people could still face charges in connection with the Jan. 6, 2021 attack on the US Capitol, according to a letter to the DC federal court from the US attorney in Washington.

Ex-Trump Fixer Cohen Says He Completed Grand Jury Testimony

Donald Trump’s former fixer Michael Cohen said he testified for a second and final time before a New York grand jury investigating the former president for potential crimes tied to hush-money payments made to a porn star during the 2016 campaign.

Gold Retailers Woo Trump Fans With Appeals to MAGA-Fueled Angst

Listen to a broadcast on a right-leaning network or podcast, scroll through Trump’s Truth Social feed or attend a convention with conservatives, and chances are you’ll hear a pitch to buy gold.

Gold retailers have found a receptive audience for marketing their products to conservatives and especially supporters of the former president who tend not to trust the Biden administration and government institutions.

Around the Administration

BIDEN’S AGENDA

• The president has no public events scheduled. White House Press Secretary Karine Jean-Pierre gives a briefing at 2 p.m.

US Demands Tiktok Owners Sell Stake in Company or Face Ban

The Committee on Foreign Investment in the US, or Cfius, demanded that TikTok’s Chinese owners sell their stakes in the video-sharing app or face a possible US ban of the app, WSJ reports, citing unidentified people familiar with the matter.

Senior FTC Staff Departures Spike as Ambitious Agenda Looms

The Federal Trade Commission’s senior attorneys are leaving at a pace not seen in at least two decades, adding to the challenges facing the agency as it pursues expansive rulemaking.

US Firms Bore Cost of Trump China Tariffs on $300 Billion

US importers bore almost the entire burden of tariffs that Trump placed on more than $300 billion in Chinese goods, raising the cost of goods bought by American companies, a report by an independent US government agency found.

Wave of Federal Judges Ditch Bench for Lucrative Big Law Jobs

George Hazel and Gregg Costa had yet to turn 40 when former President Barack Obama nominated the lawyers to become federal judges. The appointments—Hazel to a federal court in Maryland and Costa in Texas—were part of an emerging trend, as the Obama administration looked to tap younger judges for lifetime roles that could secure their seats for a generation. Roughly a decade later, Hazel and Costa opted for another path: they recently left their roles for lucrative partnerships at elite law firm Gibson Dunn & Crutcher.

Drugmakers Get Initial Medicare Price Negotiation Guidance

Drug manufacturers subject to government price negotiations starting in 2026 must submit to Medicare by Oct. 2 specific data on their product’s research and development costs, among other information, according to guidance issued Wednesday.

To contact the reporters on this story: Michaela Ross in Washington at mross@bgov.com; Brandon Lee in Washington at blee@bgov.com

To contact the editor responsible for this story: Giuseppe Macri at gmacri@bgov.com