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THE TOP
The election year policy scramble and the personnel parlor game

The election year crunch is in full force in Washington.
The Biden administration is executing top priorities on a potentially shrinking timeline. Lawmakers are trying to get tax and financial services priorities out the door before the election-focus saps the will to legislate. It’s not going well.
So much of this year will be about what the Biden administration’s financial regulators get done with the months left in the president’s current term. That’s why we sat down with Consumer Financial Protection Bureau Director Rohit Chopra. You’ll want to read closely what he says below.
Meanwhile, some people will tell you it’s too soon to think about all the policy and personnel decisions that loom large next year. But quietly, these conversations are happening.
We’ll fill you in below on the latest buzz for a second Biden or Trump term at key financial and tax policy posts.
In this edition, we also explore the growing worries among some Democrats that agencies need to get key regulations in place soon. If they don’t, they risk the possibility of a Republican-controlled Congress erasing them from the books next year via a tool the GOP used to great effect in 2017.
Finally, we know what you’ve been waiting for the last few months. Who’s up and who’s down on the Vault Power Matrix? It’s not the quail this time!
Thanks for reading. And, as always, send us all your tips, gossip and latest thoughts on all things Vault world: brendan@punchbowl.news and laura@punchbowl.news.
— Laura Weiss and Brendan Pedersen
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PRESENTED BY ELECTRONIC PAYMENTS COALITION
CRS: NO PROOF DURBIN-MARSHALL HELPS CONSUMERS OR SMALL BUSINESSES
The Congressional Research Service is the latest organization to question whether the Durbin-Marshall Credit Card Bill helps consumers or small businesses. CRS echoes the Richmond Fed in finding that consumers failed to see cost savings because of similar legislation imposing routing mandates and price caps on debit cards.
THE ANCHOR
Chopra talks lawsuits, new financial products and privacy reform
Consumer Financial Protection Bureau Director Rohit Chopra has some thoughts to share. The leader of the financial sector’s most feared agency talked to us about the year ahead for the CFPB.
Our conversation covered the agency’s bruising run of court battles, Chopra’s thoughts about a new financial product that lawmakers have been toying with and how he’s actively working with Congress to overhaul privacy law.
Litigation nation: Advocates for the largest banks and the business community have dragged the CFPB into court more than once under the Biden administration. The latest is a challenge to the agency’s credit card late fee reforms.
But that legal effort has gotten bumpy fast. A federal district judge chastised the industry’s initial approach and even suggested they may be judge shopping by bringing their case to Fort Worth, Texas.
Regulators aren’t exactly famous for talking about active litigation. But Chopra didn’t shy away from the topic, telling us it wasn’t just the CFPB in the legal limelight these days. “You’re seeing it across the board across all agencies,” Chopra said.
“There’s no question that the CFPB has been better prepared than other agencies on this because, from day one, there have been these challenges. And certainly, very well-financed lawyers on the other side know that they’re up against very talented agency lawyers.”
Chopra also said his agency continues to be responsive to how a conservative-dominated Supreme Court is changing the legal landscape. “We have focused quite a bit on textualist looks at our laws,” the director said.
Unfinished business: Chopra uses the law itself as another point of defense for the CFPB — specifically, bits of statute that have never been implemented by regulators. Some of those gaps are glaring, like long-delayed reforms in executive compensation regulation.
The CFPB takes a lot of hits from Republicans for being “aggressive” and even power-hungry. But for Chopra, these kinds of regulatory delays are the problem — not acting on the law as written.
“When [rules and regulation] take forever because of litigation — sometimes frivolous, maybe sometimes not — in many ways, that can be an abrogation of Congress’ prerogatives to fulfill what it wants to see done,” Chopra said.
That’s a key part of the pitch we’ve heard from the CFPB on its late fee crackdown. Regulators wanted to reopen part of the Federal Reserve’s implementation of the 2009 CARD Act that allowed for some fees to remain pegged to inflation.
“We have identified a very clear prohibition in credit card law that bans unreasonable fees. And we found that the credit card industry was exploiting a loophole for years to get an extra $10 billion out of it,” Chopra said.
“It’s irresponsible for us to not look at that because a credit card is the most common lending product in America,” he added.
Earned wage access: Congress has taken an interest in earned wage access, a financial product where workers can access some portion of an upcoming paycheck early. Chopra, too, has an interest here.
The CFPB announced back in January that it would be updating its guidance around EWAs — first published under the Trump administration. The big question for the product’s advocates is to what extent traditional consumer protection standards might apply.
This is an area where Chopra is keeping his cards a little closer to the chest. But when we asked for a preview of his thinking, he said the CFPB would be focused on distinguishing how EWAs are marketed versus how they may operate in practice.
Chopra also mentioned — somewhat ominously — that it was “clear” that “a number of players have been misinterpreting the guidance that was issued on this a few years ago.“
“Tell me about the different types of business models, delivery mechanisms, contractual arrangements. How do we compare and contrast that to payday loans and other similar products? And how do we make sure that there’s a consistent regulatory approach across those?”
Privacy overhaul: Chopra has a lot of thoughts about the future of data privacy, and he told us that there’s a big role for lawmakers to play here. This is an area where he’s even gotten some policy love from House Financial Services Committee Chair Patrick McHenry (R-N.C.).
“Gramm-Leach-Bliley [Act] privacy provisions are so outdated for the world we live in,” Chopra said, referring to a landmark 1999 law that, among other things, established some of the country’s first federal privacy standards for banks.
The director said he’s fielded a lot of lawmakers’ meetings about reining in the abuses of data brokers and privacy reforms writ large.
“I’ve really gotten some very good counsel on ways to push things forward that maybe aren’t so flashy, but that are going to make a big difference for people over the long run,” Chopra said.
— Brendan Pedersen
ELECTION WATCH
Financial world is abuzz about the next admin

It’s Joe Biden v. Donald Trump… again. Whoever wins will be staffing up for the second go-around across the Treasury Department and financial regulators.
Key circles in D.C. and New York are plotting out how this could all shake out. So we talked to Democrats and Republicans with ties to both administrations about what to watch after November’s results come in.
New names will emerge between now and staffing time. But the chatter has begun. Let’s get to it.
Trump 2.0: The relationship between Wall Street and Trump has always been a little weird.
The last administration had plenty of Wall Street representation, to be clear. Folks like former Treasury Secretary Steven Mnuchin, former chief strategist Steve Bannon, former National Economic Council Director Gary Cohn and former Deputy National Security Adviser Dina Powell were all Goldman Sachs alumni before they signed up.
But today, lobbyists freely admit there’s a bit of distance between the financial services sector on K Street and the Trump-verse. Think tank operations like the Heritage Foundation’s Project 2025 have largely filled the gap and taken the lead in vetting personnel.
Paul Dans, director of Project 2025 and a former chief of staff in the Office of Personnel Management under Trump, told us to expect to see “much less of people from banking syndicates, and whatever, waltzing into positions.”
“These financial positions in Treasury and whatnot — they shouldn’t be a finishing school for Wall Street. This is not where you come in and embellish your resume to move up to the next hook of the bank. Really, we need people who are rethinking and looking anew at a lot of policies that have gone dramatically off course.”
But Trump’s disinterest in this space, plus the limited number of people who can slot into complicated regulatory roles, has led a lot of downtown folks to expect former officials with private sector backgrounds to return.
To wit: Former SEC Commissioner Jay Clayton and former National Economic Council Director Larry Kudlow are K Street’s most consistent picks to lead a Trump Treasury.
We also expect some interest from Congress. Folks courting a VP nod are obvious fits for cabinet spots, but we’ve also heard the name of Sen. Bill Hagerty (R-Tenn.) get tossed around for Treasury secretary.
But this is Trump, who likes to muse about any number of people serving in various jobs. Sometimes it’s because he likes what they’ve said on TV. Sometimes it’s because someone visited Mar-a-Lago and bent his ear.
So expect to hear plenty of names floating around for Treasury secretary. Bloomberg reports people in the mix include hedge fund manager John Paulson, former U.S. trade representative Robert Lighthizer and Susquehanna International Group, LLP founder Jeff Yass.
For commission-led regulators, folks are looking down the dais: Current SEC Commissioner Hester Peirce and Federal Deposit Insurance Corp. Vice Chair Travis Hill are considered strong contenders to lead those agencies if the White House flips.
With a Trump win, there would also be the question of whether Biden-nominated officials serving out longer terms stay. IRS Commissioner Danny Werfel, for one, doesn’t plan on going anywhere.
Biden 2.0: Here’s the dynamic to watch when it comes to Biden’s economic personnel moves in a second term. Will he please the left — which could make corporate backgrounds dicier — or go more centrist?
That’s been a tension in Biden’s first term. With reelection secured, Biden might not feel as indebted to his party’s progressive wing.
We also expect more pressure on Biden to increase Black and Latino representation in top economic posts.
These factors will matter because Treasury Secretary Janet Yellen isn’t expected to stay for a second term. In another twist, Biden might need to push nominations through a Republican-controlled Senate.
Commerce Secretary Gina Raimondo and National Economic Council Director Lael Brainard are a couple of big names we heard repeatedly who could fill Yellen’s shoes. Deputy Treasury Secretary Wally Adeyemo’s name also kept coming up as someone who could be in the mix for key economic roles.
Plus, look out for the New York Department of Financial Services’ Adrienne Harris if the FDIC top job opens.
Rep. Katie Porter (D-Calif.), who just suffered a rough loss in the California Senate primary, keeps popping up as a potential successor to Consumer Financial Protection Bureau Director Rohit Chopra — if he exits. It’s not impossible, but we’re a bit skeptical that’ll be where Porter lands.
— Laura Weiss and Brendan Pedersen
PRESENTED BY ELECTRONIC PAYMENTS COALITION

The Congressional Research Service (CRS) recently released a report scrutinizing the so-called “benefits” of the Durbin-Marshall Credit Card Bill, adding to the list of research and studies that prove credit card routing mandates will not yield savings for consumers… but it will increase the bottom line of corporate mega-stores.
TICK TOCK
The regulatory countdown grows more tense
As the election closes in, Democrats are working to cement the Biden administration’s policy priorities. If they don’t move quickly, they could deliver the GOP a tool to unravel key efforts.
All kinds of rulemakings like environmental measures, Inflation Reduction Act implementation and new banking regulations could become targets. Republicans have proven they’ll flex the Congressional Review Act, which would give a new administration a path to undo recent rules.
“Time, time, time is how I describe this to every head of every agency I speak with,” Sen. Elizabeth Warren (D-Mass.) told us, describing her message on getting the 2022 IRA fully implemented. “We need to have this done and done quickly. If we didn’t learn that lesson back in 2016, then shame on us.”
Warren was referencing the boom of CRA action when the White House and Congress flipped into Republican hands in 2017. The GOP took out 16 Obama-era rules during the 115th Congress, making up the bulk of successful uses of the CRA, according to CRS.
The CRA allows Congress to undo an administration’s rule but only within a time-limited window of 60 legislative — not calendar — days after a regulation gets published in the Federal Register.
To avoid the next Congress having a say, there’s no hard date to follow right now. It’s not clear how many more legislative days there will be this year. But the estimated deadline could fall sometime in mid-May or later this summer depending on the congressional calendar.
Senate Finance Committee Chair Ron Wyden (D-Ore.) said speed is an obvious goal in getting IRA rules in place, but that the Biden administration also needs to move carefully to get them right.
The panel’s top Republican, Sen. Mike Crapo of Idaho, told us that the GOP should absolutely consider CRA options next year if the timing pans out.
It’s worth noting: The CRA isn’t the only factor at play. For the IRA, for example, Democrats want their signature law in full force to meet climate goals and to be on display ahead of the election.
Also, getting rules in place won’t stop Republicans from trying to strike the IRA’s new taxes altogether in the 2025 tax debate — if they win big in November.
— Laura Weiss
The Vault Recap
PRESENTED BY ELECTRONIC PAYMENTS COALITION
CRS QUESTIONS WHETHER DURBIN-MARSHALL WOULD HELP ANYONE AT ALL

Every member of Congress should read the CRS analysis which discusses the impact the Durbin-Marshall Credit Card Bill could have on small businesses and American families. Report after report has plainly demonstrated that consumers and small businesses did NOT save any money when Congress passed the 2010 Durbin Amendment, imposing new mandates on debit cards. Now, a decade later, why would anyone assume a monumental restructuring of our nation’s secure, worry-free credit card system would yield different results? After considering the facts, the only logical solution would be to strongly OPPOSE the Durbin-Marshall Credit Card Bill.
Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.

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