Democrats Up Pressure On Wells Fargo Executives

Groups of lawmakers in the House and Senate unveiled separate letters Wednesday aimed at heightening government scrutiny of the scandal-plagued bank, which last month settled charges that its employees created 2 million accounts without customers’ knowledge.

In the Senate, Democrats are urging the Justice Department to specifically look at the role of senior executives in the banking scandal. And in the House, members are urging regulators to make it easier to “claw back” executive pay in similar cases.

The dual letters are the latest in a series of political headaches for the bank and its top executives, who have already been pilloried by lawmakers in both parties. The Hill’s Peter Schroeder explains: https://bit.ly/2duGtVT.

After hitting a rough patch in the spring, businesses picked up hiring over the summer — private-sector employers added 175,000 jobs in August, according to ADP’s monthly employment report released on Wednesday.

And despite the slowdown last month, hiring remains on a steady track as the economy closes in on full employment.

“With job openings at all-time highs and layoffs near all-time lows, the job market remains in full-swing,” said Mark Zandi, chief economist for Moody’s Analytics, which compiles the report with ADP.

“Job growth has moderated in recent months but only because the economy is finally returning to full employment,” Zandi said. The Hill’s Vicki Needham has more: https://bit.ly/2dfJ7Ng.

The rules, first announced in May 2012, aim to provide consumers using a reloadable card with the same protections as those using traditional debit cards.

Under the rules, companies are required to provide consumers with two easy-to-read fee disclosures — one short and one long — and post the prepaid account agreements they offer online.

Companies that offer consumers the ability to use credit when they lack the funds to pay for a transaction must make sure customers have the ability to repay the debt and provide regular statements.

Though consumer groups called for an all-out ban on late fees, the Consumer Financial Protection Bureau will instead require companies to give consumers at least 21 days to repay the debt before charging any late fees, as previously proposed. The Hill’s Lydia Wheeler breaks them down: https://bit.ly/2dL3QIN.

Tonight’s highlights include Republican pushback on Treasury tax rules, a Supreme Court hearing on insider trading and a surprising endorsement from the Chamber of Commerce.

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: https://bit.ly/1NxxW2N.

The regulations to treat some inter-company debt as equity should not be finalized “in haste,” the House GOP tax writers said in a letter to Treasury Secretary Jack Lew and Office of Management and Budget (OMB) Director Shaun Donovan.

“Any revised rules should be issued as proposed regulations only, which should be finalized only after the vetting necessary to ensure that the rules are right,” the lawmakers wrote.

“Rules should be effective only when issued in final form and only on a fully prospective basis. Given the significance of these rules, they should be accompanied by a thorough analysis of the economic impact as required by law.” Here’s more from The Hill’s Naomi Jagoda: https://bit.ly/2dyzI4M.

“That is something businesses are in fact considering because if it’s third-party debt, they know it’s debt,” said Carol Doran Klein, vice president and international tax counsel for the United States Council for International Business (USCIB).

The certainty would keep the IRS from auditing companies to further prove that transactions are compliant with regulations, Doran Klein said, referring to the Treasury Department’s controversial proposed rules under tax code section 385 that would authorize the IRS to broadly change the tax treatment of certain debt to equity. The Hill Extra’s Kat Lucero explains: https://bit.ly/2dysRZ5.

The “personal benefit” test, which originated in Dirks v. SEC over 30 years ago, stated that an insider must receive some sort of personal benefit in order for illegal insider trading to have occurred. In addition, the court deemed the disclosure of non-public information to a friend or family member constituted a personal benefit. The Hill Extra’s Timothy Weatherhead walks us through the case: https://bit.ly/2dLO4m5.

The U.S. ranked 31st out of 35 countries on the Tax Foundation’s annual International Tax Competitiveness Index. Greece, Portugal, Italy and France were the only countries that were measured as having tax systems that are less competitive.

The study’s finding is unlikely to be surprising to U.S. policymakers. Many lawmakers, particularly on the Republican side, argue that the U.S. should overhaul its tax code to make it more competitive.

Last year, the U.S. was ranked 32nd in the index. The U.S. rose one spot this year because Greece fell, the Tax Foundation said. Naomi Jagoda has more: https://bit.ly/2cUlAAn.

The national business group on Wednesday endorsed Rep. Scott Peters (D-Calif.) for a third term over Republican Denise Gitsham, who’s making her first run for office.

“We need more pragmatic and commonsense leaders like Scott Peters,” the Chamber’s senior vice president and national political director Rob Engstrom said in a statement.

Peters was one of only 28 House Democrats to vote in favor of “fast-track” trade promotion authority last year to expedite congressional consideration of trade deals negotiated by President Obama. The Hill’s Cristina Marcos reports: https://bit.ly/2dFzsmx.

The SEC has proposed several rules for mutual funds and investment advisers that agency chief Mary Jo White and her staff are working to finalize before she likely departs in January.

Two of those plans could be finalized as early as this month, sources have told The Hill Extra.

One of those proposed rules would require funds to report new monthly data to the SEC. The other plan, aimed at curbing risks, would require funds to classify assets by liquidity. Anjelica Tan reports: https://bit.ly/2dSIGNz.

The talks, announced by the Federal Deposit Insurance Corporation on Wednesday, are the second in ongoing discussions between both sides of the Atlantic on how to bolster supervision of complex banks that have operations across the U.S., Europe, and the rest of the world.

Such banks include large Wall Street firms like Citigroup, JPMorgan Chase, and Goldman Sachs, as well as European institutions like Barclays, Credit Suisse, and Deutsche Bank.

The FDIC is hosting the talks at its headquarters in Washington. Officials timed the meeting to coincide with the annual meetings of the World Bank and International Monetary Fund: https://bit.ly/2dyyWoy.