| | | | |  | | By Zachary Warmbrodt | | Presented by |  | | | 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.
| | The crypto world is about to learn who its friends are in Washington, thanks to a landmark House vote later this month. The extent to which the allegiance is driven by the interests of crypto voters or the promise of crypto campaign cash is worth dissecting ahead of the election. The House is poised to make crypto politics the main event in less than two weeks when it holds a vote on GOP-led legislation that would set new rules for digital asset trading. It will mark the first time a full chamber of Congress has taken up a big crypto policy bill, following years of industry complaints about its conflicts with the current system. The bill is almost certainly DOA with the majority-Democrat Senate. But it will force hundreds of lawmakers to go on the record about where they stand on the issue, which the crypto industry claims is a concern for voters in states that are critical to deciding control of Washington. Crypto super PACs armed with tens of millions of dollars are eyeing battleground states to further make that case. Another new crypto PAC tied to the Coinbase exchange launched Friday. And of course, there’s a Trump twist that’s still unfolding. As Jasper Goodman reported last week, crypto is emerging as former President Donald Trump’s new weapon against President Joe Biden. While Trump once derided digital currency, he’s now caught up with the increasingly crypto-friendly GOP. At a Mar-a-Lago event promoting his own NFT, he told crypto believers that they’d better vote for him because of Biden’s regulatory crackdown on the industry. In an unusual move, he even called out Biden’s SEC Chair Gary Gensler for taking a hard line with crypto firms, which Gensler says are skirting federal securities laws. Jasper’s story helped provoke a big response from billionaire Mark Cuban, a Biden ally. “If @joebiden loses, there is a good chance you will be able to thank @GaryGensler and the @NewYork_SEC,” Cuban wrote to his 8.8 million followers on X, formerly known as Twitter. “Crypto is a mainstay with younger and independent voters.” He urged Democrats in Congress to intervene. “This is the first technology that I can recall that we have handed to the rest of the world, while shutting it down here,” wrote Cuban, a longtime SEC critic. Setting aside industry-commissioned polling, Cuban may be overstating the potential electoral risks for Biden. Only about 17 percent of U.S. adults said in a 2023 Pew Research Center survey that they have ever invested in, traded or used a cryptocurrency, consistent with the prior two years of results. Most who had heard at least a little about crypto said they weren’t confident in its safety or reliability. Cuban may be right about it skewing toward the youth. Pew found that younger men were more likely to use crypto than men 50 and older and women of any age.
| | A message from the American Bankers Association: Americans appreciate free checking and other low-cost financial products that help bring more consumers into the regulated banking system. Today, the progress we’ve made in reducing the number of unbanked is at risk, because the Fed wants to change the rules around debit card transactions and limit the revenue banks use to offer free checking and other popular products. Tell the Fed to stand with consumers and withdraw Regulation II. Act now. | | | Whether the numbers are there or not, comments like Trump’s and Cuban’s are prompting a big debate in the crypto community about a potential single-issue voter movement, where crypto ideology would determine which candidates you support. “Radical policies aimed to ban or severely cripple an industry that enshrines American Constitutional values into the global financial system will lead to backlash,” Ryan Selkis, one of the most outspoken advocates for crypto-focused voting, wrote Sunday. But do crypto-friendly politicians really care, beyond the $80-plus million in play from crypto super PACs? In a Friday op-ed, Molly Jane Zuckerman and Jeff Albus with the news site Blockworks warned that making crypto an electoral litmus test would be “falling for empty campaign rhetoric.” In a separate piece, CoinDesk’s Danny Nelson wrote that Trump’s comments at Mar-a-Lago revealed that he is “no expert on cryptocurrencies” but rather “an expert at selling cryptocurrencies.” “The first two points don't matter,” Nelson wrote. “Because Trump has declared himself the champion of cryptocurrencies.” Hey Hey, My My — Go see Neil Young and Crazy Horse, who put on a great show out here in Virginia this weekend. Send tips to zwarmbrodt@politico.com.
| | | | | | THE GOLD STANDARD OF FINANCIAL SERVICES POLICY REPORTING & INTELLIGENCE: POLITICO has more than 500 journalists delivering unrivaled reporting and illuminating the policy and regulatory landscape for those who need to know what’s next. Throughout the election and the legislative and regulatory pushes that will follow, POLITICO Pro is indispensable to those who need to make informed decisions fast. The Pro platform dives deeper into critical and quickly evolving sectors and industries, like financial services, equipping policymakers and those who shape legislation and regulation with essential news and intelligence from the world’s best politics and policy journalists.
Our newsroom is deeper, more experienced, and better sourced than any other. Our financial services reporting team—including Zach Warmbrodt, Victoria Guida and Declan Harty—is embedded with the market-moving legislative committees and agencies in Washington and across states, delivering unparalleled coverage of financial policy and the financial services industry. We bring subscribers inside the conversations that determine policy outcomes and the future of industries, providing insight that cannot be found anywhere else. Get the premier news and policy intelligence service, SUBSCRIBE TO POLITICO PRO TODAY. | | | | | Monday … Fed Vice Chair Philip Jefferson gives a speech on monetary policy communication in Cleveland at 9 a.m. … Treasury Secretary Janet Yellen will give remarks on broadband infrastructure and rural communities in Fredericksburg, Virginia, at 11:40 a.m. Tuesday … The Producer Price Index for April is out at 8:30 a.m. … Fed Governor Lisa Cook gives a speech on community development financial institutions in New York at 9:10 a.m. … PCAOB investor advocate Saba Qamar and U.K. Shareholders’ Association Chair Charles Henderson speak at a Peterson Institute event on auditing at 9 a.m. … Fed Chair Jerome Powell has a moderated discussion with De Nederlandsche Bank President Klaas Knot in Amsterdam at 10 a.m. … Wednesday … The Consumer Price Index for April is out at 8:30 a.m. … FDIC Chair Martin Gruenberg, Fed Vice Chair for Supervision Michael Barr and Acting Comptroller Michael Hsu testify at House Financial Services at 10 a.m. … FTC Chair Lina Khan testifies at House Appropriations at 10 a.m. … Export-Import Bank President and Chair Reta Jo Lewis testifies at Senate Appropriations at 2 p.m. … Financial Services Chair Patrick McHenry, Fed Governor Michelle Bowman and Sen. Ted Cruz are among the speakers at the DC Blockchain Summit Thursday … The U.S. Census releases April housing starts at 8:30 a.m. … Gruenberg, Barr and Hsu testify at Senate Banking at 10 a.m. … Friday … Fed Governor Christopher Waller gives a speech on payments in Minneapolis at 10:15 a.m.
| | | | JOIN 5/22 FOR A TALK ON THE FUTURE OF TAXATION: With Trump-era tax breaks set to expire in 2025, whoever wins control of Congress, and the White House will have the ability to revamp the tax code and with it reshape the landscape for business and social policy. Join POLITICO on May 22 for an exploration of what is at stake in the November elections with our panel dissecting the ways presidential candidates and congressional leaders are proposing to reshape our tax rates and incentives. REGISTER HERE. | | | | | | | | | Biden losing ground? — An FT-Michigan Ross poll finds that voters are growing less supportive of the president’s economic policies, with more becoming concerned about income and housing. Eighty-percent of voters say inflation is one of their top financial challenges. On a related note, U.S. consumer sentiment fell to a six-month low in May, Reuters reports. Brace for good news — U.S. inflation probably died down a bit in April for the first time in six months, per Bloomberg. The Labor Department on Wednesday is expected to report that the core consumer price index, which omits food and fuel, rose by 0.3 percent from a month earlier. Bidenomics 2.0 — With an epic tax policy fight looming next year, White House National Economic Council Director Lael Brainard is making the case for higher rates on corporations and the ultra-wealthy, AP reports.
| | | | A message from the American Bankers Association:   | | | | | The FTC's role in real estate — Josh Sisco reports that Sen. Amy Klobuchar is urging the FTC to not exempt real estate deals from merger review rules. The Minnesota Democrat said in a letter Friday that institutional investors own large chunks of real estate, with close to 30 percent of some neighborhoods in her state controlled by private firms. “Given this reality, commercial acquisitions of housing-related properties should not be exempt from antitrust reporting requirements intended to protect consumers from harm that can occur when markets consolidate, such as high prices, reduced service, and less innovation,” she said. The rent is you know what — The Fed is counting on housing costs to come down to help tame inflation, but the Wall Street Journal reports that analysts worry it may not happen. Industry executives say new apartment supply is being “quickly absorbed” because of immigration and job and wage growth.
| | CFTC proposes to outlaw election betting — A new CFTC proposal would ban so-called event contracts that serve as wagers on political elections, Declan Harty reports. CFTC Chair Rostin Behnam told MM last week that permitting the contracts “puts the CFTC in a very difficult position of being an election cop.” Credit card rule paused — Per Katy O’Donnell, a federal judge in Texas agreed to grant banks a preliminary injunction to halt the CFPB’s late fee cap. The rule was set to take effect this week. Yellen presses Congress on mortgages — The Treasury secretary is calling on lawmakers to set up a fund for troubled nonbank mortgage companies, Katy reports. The Financial Stability Oversight Council issued a report on potential risks.
| | A message from the American Bankers Association: The Federal Reserve’s Regulation II proposal to lower the cap on debit card interchange is a mistake we need to avoid. The proposal will pad the profits of mega-retailers at the expense of everyday Americans. All you need to do is look at history to know what’s coming. More than 10 years after the Durbin Amendment was enacted, Fed studies show consumers have yet to benefit from the lower prices that retailers promised. Instead, merchants pocketed the savings from the government-mandated price cap, while community banks lost a key revenue source that they used to cover the cost of debit rewards and other popular products. The new Fed price cap proposal threatens to do even more damage to consumers by slashing revenue banks use to pay for free checking and other services that promote financial inclusion. Tell the Fed to stand with consumers and withdraw Regulation II. Act now. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
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