| | | | |  | | By Katy O'Donnell | | | 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. Programming Note: We’ll be off this Monday for Martin Luther King Jr. Day but will be back in your inboxes on Tuesday, Jan. 16.
| | It’s been a big week for the National Association of Realtors, the nation’s largest trade group. The abrupt resignation of NAR’s president — just as the organization moved for a new trial in a Missouri court case set to cost it up to $5.4 billion in damages — marked the group’s fourth high-profile departure in five months. The turmoil comes as the industry is staring at its biggest external challenge in a generation. A response is due next month on the motion for a new trial in the Missouri case, which comes against the backdrop of a Department of Justice antitrust investigation into NAR’s practices and a slew of other private lawsuits piling up around the country over the way real estate agents are paid. Now, the powerful lobby — NAR has 1.6 million members and is second only to the Chamber of Commerce in political spending over the last 25 years — appears rudderless as it navigates a major legal reckoning that could dramatically deplete its coffers. “Should they be completely hamstrung by these twin crises of the cultural problems and the crippling damages they may face from all these lawsuits, the question is can they still be the voice for the industry?” said Jason Haber, a real estate agent and NAR critic. “Can they be that voice given all these distractions? I don’t know,” added Haber, who founded the NAR Accountability Project in August after the New York Times published an expose detailing a “culture of fear” and widespread sexual harassment at the trade group. “We are fully engaged on the legal, business, and advocacy issues that are a top priority to our members and, most importantly, the consumers they serve,” NAR spokesperson Mantill Williams told MM. “[New] NAR President Kevin Sears has served in numerous leadership positions for over two decades at the local, state, and national association levels, including most recently as Incoming president.” Former NAR president Kenny Parcell, who was named in the Times report, resigned in August shortly after it was published. Former CEO Bob Goldberg resigned in November, two days after the federal jury in Missouri found NAR and two corporate brokerages liable for $1.8 billion — which could balloon to $5.4 billion with treble damages — after deciding they were guilty of conspiring to inflate home commissions. Donna Gland, NAR’s HR chief, retired at the end of the year. The group lost more than 26,300 members last year, the first decline since 2012, according to NAR data. And then on Monday, Tracy Kasper, Parcell’s successor, herself suddenly stepped down, saying she had been threatened with blackmail over a “past personal, non-financial matter,” according to an NAR statement. The latest dramatic turn at the embattled industry powerhouse left housing lobbyists transfixed. “I think they’re getting bum advice,” said one industry insider who asked not to be named to frankly discuss the chaos. “What the [heck] is a ‘non financial personal matter’?” At the same time, the insider noted, the 115-year-old group still has some of the deepest pockets in town. “Has any member of Congress turned down their money?” he said. “No. The Washington operation goes on.” Happy Friday — Feel free to forward any blackmail threats to me at kodonnell@politico.com.
| | | | A message from Electronic Payments Coalition: CREDIT UNIONS & COMMUNITY BANKS IN All 50 STATES OPPOSE THE DURBIN-MARSHALL CREDIT CARD BILL: Local credit unions and community banks serve an essential role in supporting Main Street. So, when 9,600+ credit unions and community banks throughout the country oppose the Durbin-Marshall credit card bill, Congress should pay attention. Durbin-Marshall lines the pockets of corporate mega-stores by shifting costs and risks to credit unions, community banks, and their 135 million customers. Click here to learn more. | | | | | BPI taps Scalia for litigation — Former Labor Secretary Eugene Scalia is working with the Bank Policy Institute to prepare the lobbying group for litigation over a planned capital-increase rule by the Federal Reserve and other regulators, if need be, a BPI spokesperson confirmed to our Declan Harty. Banks have already launched an aggressive campaign pushing back on the Basel Endgame proposal, but the hiring of Scalia — a prominent administrative law expert and the son of the late Supreme Court Justice Antonin Scalia — is a significant signal of how far they are willing to go. The new rules would boost capital requirements for the banks by 20 percent to protect them against potential financial shocks. “The agencies have to do their own work, explaining why these new requirements are properly calibrated, and why their benefits are worth the costs,” Scalia said in an interview with Semafor, which earlier reported the news of his hire. “This proposal doesn’t do that.”
| | | | SUBSCRIBE TO CALIFORNIA CLIMATE: Climate change isn’t just about the weather. It's also about how we do business and create new policies, especially in California. So we have something cool for you: A brand-new California Climate newsletter. It's not just climate or science chat, it's your daily cheat sheet to understanding how the legislative landscape around climate change is shaking up industries across the Golden State. Subscribe now to California Climate to keep up with the changes. | | | | | | | | | Bitcoin ETFs, finally — Our Declan Harty reports: Bitcoin broke onto Wall Street exchanges on Thursday, when the first-ever U.S. bitcoin exchange-traded funds began trading. The debut was a crucial test of investor appetite for the notoriously volatile asset class — and the ETFs did not disappoint. Volumes reached into the billions. At one point, bitcoin itself closed in on its highest point since early 2022. Not everyone was buying in. Vanguard, the money management giant, has no plans to offer customers trading in the ETFs, a spokesperson for the firm said. The products don’t align with the firm's focus on assets that it views as “building blocks of a well-balanced, long-term investment portfolio,” they added. Certain crypto skeptics, meanwhile, were still lamenting the SEC’s approval of the products, which came months after a court forced the agency to reevaluate a prior rejection of an ETF application. American University Professor Hilary Allen said she wished the agency had stood by its long-standing resistance and denied the latest batch of ETF bids. Up until the decision came down, Better Markets, among others, argued that the SEC still had room to deny the products by explaining the danger. Further blocking the products, however, would have undoubtedly risked drawing another costly lawsuit from the industry. Allen said she understood that the SEC was “boxed in” over time by the industry’s legal maneuvering. SEC Chair Gary Gensler described the decision to approve as “the most sustainable path forward.”
| | | | A message from Electronic Payments Coalition:   | | | | |
First in MM: Dems ramp up Navy Federal scrutiny — Democrats on Capitol Hill are scrutinizing the mortgage lending practices at the largest U.S. credit union, Navy Federal, following a CNN report that showed racial disparities in mortgage approval rates.
In a letter sent to the credit union on Thursday obtained first by MM, 40 Democratic lawmakers led by Rep. Emanuel Cleaver of Missouri asked an array of questions about lending discrimination and requested a meeting with Navy Federal CEO Mary McDuffie. Separately, a group of Senate Democrats called on the CFPB and HUD to review Navy Federal’s mortgage lending practices in a letter signed by Banking Chair Sherrod Brown (D-Ohio), Finance Chair Ron Wyden (D-Ore.), Armed Services Chair Jack Reed (D-R.I.) and others. The CFPB said it is reviewing the lawmakers’ request. A HUD spokesperson said the agency “is deeply concerned about racial disparities in mortgage lending opportunities.” A Navy federal spokesperson said in a statement that the credit union has launched its own review to assess its “mortgage lending policies and practices.” “Navy Federal is committed to serving each and every one of our members fairly, and we strive every day to expand economic opportunity and access to credit for our diverse community of members,” the spokesperson said. Scott, Brown bash House over fentanyl bill — The leaders of the Senate Banking Committee on Thursday took aim at the House’s move to strip bipartisan fentanyl trafficking legislation from the annual defense spending package late last year and called on the lower chamber to pass the bill. House Financial Services Chair Patrick McHenry (R-N.C.) blocked the fentanyl bill and other finance legislation from making it into the National Defense Authorization Act in a failed bid to include crypto regulatory reforms in the package. Sen. Tim Scott of South Carolina, the Banking Committee's top Republican, said at a hearing it is a “travesty” that the FEND Off Fentanyl Act has not already become law. Sherrod Brown, the committee chair, said the “House needs to finish the job, needs get this bill to the president’s desk.”
| | | | YOUR GUIDE TO EMPIRE STATE POLITICS: From the newsroom that doesn’t sleep, POLITICO's New York Playbook is the ultimate guide for power players navigating the intricate landscape of Empire State politics. Stay ahead of the curve with the latest and most important stories from Albany, New York City and around the state, with in-depth, original reporting to stay ahead of policy trends and political developments. Subscribe now to keep up with the daily hustle and bustle of NY politics. | | | | | | | | Chamber blasts Biden, Trump on trade — The U.S. Chamber of Commerce on Thursday attacked the trade policies of both President Joe Biden and former President Donald Trump and called for a revival of U.S. support for free trade that characterized the post-World War II era, our Doug Palmer reports. “The truth is that we've seen a retrenchment on trade over the past decade and I think the American business community would like to see candidates and politicians at all levels of government who really understand the need for global leadership,” Suzanne Clark, the business group’s CEO and president, told reporters after her annual speech on the State of American Business.
| | | | A message from Electronic Payments Coalition: CREDIT UNIONS & COMMUNITY BANKS IN All 50 STATES OPPOSE THE DURBIN-MARSHALL CREDIT CARD BILL: The Durbin-Marshall credit card bill would create new government mandates on credit cards that would put consumer data and access to credit at risk. The bill would benefit corporate mega-stores, like Walmart and Target, at the expense of Main Street and the 135 million Americans who rely on credit unions and community banks. The threat of Durbin-Marshall to small financial institutions is so clear that 9,600+ credit unions and community banks in America are opposed to the bill. They also see through the so-called “carve out” for smaller banks which is a hoax to try and buy their support. Their message to Congress is simple: on behalf of credit unions and community banks in all 50 states, commit to actively opposing the Durbin-Marshall credit card bill. Click here to learn more. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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