Wall Street’s dream speaker

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Oct 20, 2023 View in browser   By Zachary Warmbrodt Presented by U.S. Bank Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. QUICK FIX It’s a prospect so enticing that some executives are afraid to jinx it on the record: Wall Street’s most-trusted Republican, Rep. Patrick McHenry, might run the House. Washington spent Thursday obsessing over the possibility. The movement to empower McHenry as more than just a caretaker speaker got its long-awaited burst of momentum and then suffered a GOP revolt. But McHenry still has the gavel and there’s no clear path forward on an alternative. For the business community’s believers in the bow tie, all hope is not lost. Your MM host and the intrepid Jasper Goodman have a new piece that tries to capture corporate America's excitement for McHenry. "Patrick McHenry is the best,” Anthony Scaramucci told Jasper. “He would be the No. 1 draft pick for Wall Street.” The hope in the business world has been that having McHenry at the helm of the House might add some stability as the U.S. stares down another government shutdown next month. McHenry began his career by throwing bombs and torpedoing bank bailouts. But he’s emerged in recent years as a pragmatic, bipartisan dealmaker. He’s one of the House GOP’s top liaisons with the business community, thanks to his long-time leadership role at the Financial Services Committee. And he’s been a counterweight to the House GOP’s predilection for economy-rattling brinksmanship over things like the federal debt limit. “He's non-threatening,” said one industry executive who requested anonymity to avoid tanking McHenry’s odds. His “measured manner and pragmatic leadership style would serve the House well,” another big bank lobbyist told MM. Want to know even more about Patrick McHenry, dubbed “the greatest name in politics” by former President Donald Trump? Read your MM host’s latest primer on how he got here and what’s next. Happy Friday — McHenry world, how are you feeling today? MM is here to listen: zwarmbrodt@politico.com. A message from U.S. Bank: At U.S. Bank, we believe young people deserve access to financial education. That’s why we partner with Junior Achievement chapters around the country to teach young people the skills they need to take charge of their economic and academic success. By supporting the next generation, we are investing in communities across the country not just today, but for decades to come. Because U.S. Bank is small enough to care, and big enough to make a difference. Learn more.   Driving the day The House may take another speaker vote ... President Joe Biden meets with EU officials at the White House on security and trade … Cleveland Fed President Loretta Lester speaks at the Shadow Open Market Committee meeting in New York at 12:15 p.m. … Sen. Elizabeth Warren chairs a Senate Banking field hearing on the economic impact of federal investments in Massachusetts at 3 p.m. House Republicans hit ‘rock bottom’ — The implosion of the empower-McHenry push has left the GOP without a backup plan, our Congress team reports. Rep. Jim Jordan is planning to seek another speaker vote today. The sense of urgency may grow after Biden Thursday night urged Congress to pass aid for Israel and Ukraine. Inflation’s still too high, Powell says — Fed Chair Jerome Powell left open the possibility that the central bank is done raising interest rates for now but warned the fight against inflation is not over, Victoria Guida and Sam Sutton report. “Inflation is still too high, and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” he said at the Economic Club of New York. Powell was reportedly escorted from the room because of climate protesters. The data rule is here — The CFPB proposed a landmark financial data regulation that would make it easier for consumers to switch banks and require greater data security from fintechs, Victoria and Katy O’Donnell report. The CFPB got a PR lift from the White House. National Economic Council Director Lael Brainard told reporters the rule would “help ensure financial companies compete based on service quality and pricing.”   A message from U.S. Bank:   On the Hill What’s been happening at House Financial Services? — McHenry’s occupied but he’s still the chair. Senior Republicans have been agitating for the committee to get back to work, Eleanor Mueller reports. The panel this week announced a series of subcommittee hearings that will be led by other members. “We have an excellent committee staff. We have an excellent set of subcommittee chairs,” Financial Services Vice Chair French Hill told Eleanor. “And they're all carrying on in the right way with Patrick's full guidance and leadership.” Beyond the day-to-day committee work, Hill said he’s concerned about getting Financial Services’ crypto bills to the floor given the other scheduling problems in the House. “Part of the biggest challenge for us to move our digital assets bills … is floor time,” he said. “As we push off these decisions about appropriations and the important farm bill, we're cutting into coordinating floor time between now and the holiday.”   A NEW POLITICO PODCAST: POLITICO Tech is an authoritative insider briefing on the politics and policy of technology. From crypto and the metaverse to cybersecurity and AI, we explore the who, what and how of policy shaping future industries. We’re kicking off with a series exploring darknet marketplaces, the virtual platforms that enable actors from all corners of the online world to traffic illicit goods. As malware and cybercrime attacks become increasingly frequent, regulators and law enforcement agencies work different angles to shut these platforms down, but new, often more unassailable marketplaces pop up. SUBSCRIBE AND START LISTENING TODAY.     Crypto Treasury’s crypto crackdown — The Treasury Department invoked the Patriot Act to designate foreign crypto mixing services as a threat to national security, Sam reports. The department cited how services that anonymize digital asset transactions have made it harder to track the financial activity of sanctioned entities like Hamas and North Korean state actors. Sen. Elizabeth Warren said: “The Biden administration is using the tools it has to take swift and significant action to crack down on crypto-financed terrorism. Congress should also step up." She and 104 other lawmakers earlier this week urged Treasury and the White House to take action against crypto money laundering. ICYMI: Warren and Sen. Roger Marshall, the lead Republican co-sponsor of her crypto anti-money laundering bill, made their case in the WSJ opinion section this week. J.W. Verret, associate professor at George Mason University’s law school, pushed back. SEC drops Ripple charges — The SEC is dropping charges against Ripple Labs CEO Brad Garlinghouse and Executive Chair Chris Larsen, Declan Harty reports. The agency had accused them of helping the crypto company illegally offer and sell unregistered securities. The move is likely to fan optimism in the crypto industry about its many ongoing legal battles against the SEC. Coinbase picks Ireland as European base — Coinbase has selected Ireland as its EU hub under Europe’s new crypto rulebook, our Bjarke Smith-Meyer reports in Brussels. Coinbase secured its e-money institution license from the Irish Central Bank four years ago. It also registered on the Emerald Isle as a virtual asset service provider last December. Coinbase is also registered in Germany, Italy, the Netherlands and Spain. But “due to our existing operational structure in Ireland, we have access to deep talent pools with significant expertise in both financial services and innovative new technologies,” Coinbase vice president and regional managing director Daniel Seifert said in a statement. FTX general counsel testifies — Per the FT, a former top in-house lawyer at FTX testified that Sam Bankman-Fried asked for “legal justifications” to explain how billions in customer funds ended up at his private trading firm as he sought a rescue from private equity firm Apollo.   PLAYBOOK IS GOING GLOBAL! We’re excited to introduce Global Playbook, POLITICO’s premier newsletter that brings you inside the most important conversations at the most influential events in the world. From the buzzy echoes emanating from the snowy peaks at the WEF in Davos to the discussions and personalities at Milken Global in Beverly Hills, to the heart of diplomacy at UNGA in New York City – author Suzanne Lynch brings it all to your fingertips. Experience the elite. Witness the influential. And never miss a global beat. BE PART OF THE CONVERSATION. SUBSCRIBE NOW.     Climate First in MM: Sierra Club pushes SEC on ESG funds — The Sierra Club has a reminder for the SEC as Gary Gensler’s agency knocks out rule after rule: Don’t forget about ESG marketing, Declan reports. Ben Cushing, campaign director of fossil-free finance for the group, and John Kostyack, a consultant, press the SEC in a new letter to bar funds from ESG-related marketing if ESG factors are not central to their investment strategies. The letter ties back to a pending rule from the SEC intended to make sure that investors know what they’re buying when they see an array of funds touting themselves to be green, sustainable and ESG-friendly. A message from U.S. Bank: At U.S. Bank, community is everything. That’s why we’re investing in communities around the country by partnering with organizations like Junior Achievement. Together, we are teaching young people the skills they need to take charge of their economic and academic success. Students in these programs learn valuable financial education lessons, build professional skills and plan for the future. We are proud to offer our staff the opportunity to mentor young people in practical, meaningful ways that will impact their lives as they grow into adulthood. By supporting the next generation of Americans, we’re investing in the future of the country and its communities. U.S. Bank. Small enough to care, and big enough to make a difference. Learn more.     Follow us on Twitter Mark McQuillan @mcqdc Zachary Warmbrodt @Zachary Victoria Guida @vtg2 Declan Harty @ @declanharty Eleanor Mueller @eleanor_mueller Katy O'Donnell @katyodonnell_ Sam Sutton @samjsutton   Follow us

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