Faster payments don’t require cryptocurrency, says Liang

Under Secretary of the Treasury for Domestic Finance Nellie Liang discussed the Biden Administration’s vision for how digital assets might fit into a faster, more efficient payments system at a Brookings Institution webinar yesterday. Liang reviewed the recommendations of Treasury’s report on “The Future of Money and Payments,” one of three submitted to the White House in response to President Biden’s Executive Order on responsible development of digital assets. While one of those recommendations calls for serious consideration of a central bank digital currency (CBDC), the report emphasizes the need to pursue and support instant payments that don’t involve crypto assets. With the Federal Reserve planning to launch FedNow next year, “the U.S. government should promote development and use of innovative technologies that allow consumers to more readily access instant payment systems,” Liang said. Treasury also recommended establishing a federal framework for nonbank payment service providers.

Megabank CEOs face House, Senate grilling
The CEOs of the nation’s seven largest consumer-facing banks — Bank of America, Citigroup, JPMorgan Chase, PNC Financial, Truist, U.S. Bancorp, and Wells Fargo — spent all day Wednesday and much of Thursday on Capitol Hill, testifying before the House Financial Services Committee and the Senate Banking Committee. The bank money-transfer service Zelle came under fire, particularly on the Senate side, where Senators Robert Menendez (D-NJ) and Elizabeth Warren (D-MA) berated bank CEOs for not providing detailed information about the extent of fraud on the platform. The bank CEOs expressed concern about inflation, and said that higher capital requirements would curtail lending. JPMorgan Chase CEO Jamie Dimon criticized the Administration’s initiative to cancel student loan debt, saying it did nothing to address the underlying problems of underwriting and rising tuition.

Senate panel highlights senior scams
The Senate Special Committee on Aging held a hearing yesterday to discuss methods of preventing fraud against elder Americans, and to release its annual “Fighting Fraud” report in English and Spanish. Witnesses told the Committee about their own experiences of identity theft and business impersonation scams, two of the most common forms of elder financial abuse. Impersonation of government officials was the most frequently reported scam, and many of the scams involved purchases of gift cards. Committee Chairman Bob Casey (D-PA) and the Committee’s ranking member, Senator Tim Scott (R-SC), hailed the creation of the Scams Against Older Adults Advisory Group as part of the bipartisan Stop Senior Scams Act passed earlier this year. That group will hold its first meeting next Thursday.

House work continues on right to repair
The House Rules Subcommittee on Legislative and Budget Process held an unusual “original jurisdiction” hearing Wednesday on HR 4006, the Fair Repair Act, introduced by Subcommittee Chairman Joe Morelle (D-NY). HR 4006 addresses different aspects of the right-to-repair issue than HR 6570, the REPAIR Act sponsored by Rep. Bobby Rush (D-IL), or HR 3664, the SMART Act, sponsored by Rep. Darrell Issa (R-CA). Morelle’s legislation focuses on electronic devices, specifically excluding motor vehicles. All three bills have bipartisan support, but concerns persist about risks to innovation and intellectual property rights.

Mortgage originations rise while refinancings fall, CFPB reports
This week the Consumer Financial Protection Bureau (CFPB) published its annual report on residential mortgage lending, looking at trends and statistics as of year-end 2021. Refinancings hit their peak in March 2021, and most of last year’s 2.4% increase in closed-end mortgage originations was due to jumbo home purchases. The number of reporting mortgage lenders decreased by 3.1% from 2020 to 2021, and the top 25 lenders’ combined market share continued to grow, to 43.9% of total volume and 53% of all refinancing loans. Non-white borrowers’ share of home purchase loans also grew from 2020 to 2021, but the study found that Black and Hispanic white borrowers continued to qualify for lower median loan amounts, have higher denial rates, and pay higher median interest rates and loan costs overall.

Confirmations, Nominations, Departures

Rep. Ted Deutch (D-FL) made his farewell remarks on the House floor on Wednesday, as he prepares to leave office at the end of this month to become CEO of the American Jewish Committee.

President Biden nominated Travis Hill and Jonathan McKernan to serve as members of the Federal Deposit Insurance Corporation (FDIC), and nominated Hill to serve as Vice Chair. Hill, a former Senate Banking Committee staffer, was Senior Advisor to the Chairman and Deputy to the Chairman for Policy at the FDIC from 2018 to 2022. McKernan is currently a Senior Counsel at the Federal Housing Finance Agency (FHFA), detailed to the minority staff of the Senate Banking Committee.

The Week Ahead

Next week begins with Rosh Hashanah, and we wish all those celebrating a sweet new year. Congress is packing its work into Wednesday through Friday, in hopes of getting out of town by the first of October. Senate Majority Leader Chuck Schumer (D-NY) has already told the Senate they’ll be working past that deadline.

September 28 at 2:15 p.m. Senate Commerce Subcommittee on Aviation Safety, Operations, and Innovation holds a hearing on “FAA Reauthorization: Integrating New Entrants into the National Airspace System,” looking specifically at issues related to drones and advanced air mobility (AAM).

September 29 at 10:00 a.m. House Committee on Transportation & Infrastructure holds a hearing on “Investing in Our Nation’s Infrastructure and Workers: Why it Matters.”

September 29 at 10:00 a.m. Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “Examining Outbound Investment.”

September 29 at 10:30 a.m. House Science Subcommittee on Research & Technology holds a hearing on “Trustworthy AI: Managing the Risks of Artificial Intelligence.”

September 29 at 12:30 p.m. The Federal Housing Finance Agency holds the first of three listening sessions to solicit feedback from stakeholders as part of its “FHLBank System at 100: Focusing on the Future” initiative. The listening sessions will continue on September 30 and October 4, beginning at 12:30 p.m. on both days. The public can register to watch these sessions here.

September 29 at 2:30 p.m. The Federal Reserve Bank of New York hosts a virtual event on the role of fintech companies in unsecured consumer lending to low and moderate income households.

September 29 at 2:30 p.m. The Federal Trade Commission convenes the first meeting of the Scams Against Older Adults Advisory Group.

The Ellis Insight - Jim Ellis on political news

SENATE

Arizona: The Trafalgar Group’s new Arizona survey (9/14-17; 1,080 AZ likely general election voters; multiple sampling techniques) sees Sen. Mark Kelly’s (D) previously large lead dwindling to 47-45% over Republican venture capitalist Blake Masters.

Earlier in September, Emerson College (9/6-7; 627 AZ likely general election voters; multiple sampling techniques) arrived at exactly the same conclusion: Sen. Kelly leading 47-45%. Remembering that the 2020 Senate race closed quickly against Kelly, limiting him to a 51-49% victory over appointed Sen. Martha McSally (R) after leading by an average margin of 6.6% through 21 conducted October polls according to the Real Clear Politics polling archives, the 2022 race looks to be headed toward a very interesting conclusion.

Arkansas: It has been assumed that Sen. John Boozman (R) secured a third term in office when he won his contested Republican primary back in March. A Hendrix College/Talk Business Net survey, from the organizations that regularly sponsor Arkansas political polls, finds Mr. Boozman in predictably strong shape for the November election. The survey (9/12; 835 AR likely general election voters) gives the Senator a 44-31% advantage over civil rights activist and realtor Natalie James (D).

Georgia: In what is proving a seesaw affair between Sen. Raphael Warnock (D) and former NFL and University of Georgia football star Herschel Walker (R), the new Atlanta Journal-Constitution/University of Georgia poll (9/5-16; 861 GA likely general election voters) again detects a change in leadership. The last three polls posted Sen. Warnock to leads between four and six points, and now the AJC/UGA data finds Mr. Walker moving ahead, 46-44%.

Another survey, from YouGov polling for CBS News (9/14-19; 1,148 GA registered voters; online) shows the same two-point margin but in Sen. Warnock’s favor, 51-49%. The exhaustive poll asked 72 questions, and while Sen. Warnock is clearly more favorably viewed that Mr. Walker, the vote continues to remain virtually even.

Ohio: In the mid-August through early September period, three pollsters found US Rep. Tim Ryan (D-Warren/Youngstown) snatching the polling lead away from GOP author J.D. Vance. The research entities Impact Research, Suffolk University, and Fallon Research, in studies conducted during the August 17 through September 11 time realm, found Rep. Ryan trending ahead with margins between one and six points.

Two news polls, however, see the race flipping back to Mr. Vance. Emerson College (9/10-13; 1,000 OH likely voters; multiple sampling techniques) and the Civiqs survey research entity, polling for the Daily Kos Election site (9/10-13; 780 OH likely general election voters), and in the field during the same period, see Mr. Vance now holding close leads of 44-40 and 48-45%, respectively.

Utah: It took a while to rebuff the Impact Research group’s early September poll that posted Independent Evan McMullin to a 48-47% lead over two-term Utah Sen. Mike Lee (R), but we now see conflicting looks as to what may be happening in this largely under-the-radar Senate challenge. OnMessage (9/13-15; 700 UT likely voters; live interview), polling for the National Republican Senatorial Committee (NRSC), reports Sen. Lee to be holding a 51-34% advantage, a major difference from the Impact Research survey of two weeks earlier.

Following OnMessage, Lighthouse Research (8/30-9/13; 509 UT likely voters), polling for the Utah Debate Commission, projects the Senator to be holding a similar 48-37% margin over Mr. McMullin. Utah’s strongly Republican voting history suggests that these two latter polls finding Sen. Lee holding a substantial edge are likely more reflective of what will happen on election day rather than the McMullin poll.

Wisconsin: Since the August 9th Wisconsin primary, we’ve seen several polls conducted of the Wisconsin Senate campaign. Immediately after the nomination vote, Lt. Gov. Mandela Barnes (D) opened the general election cycle with a polling lead. Marquette University Law School, a regular Wisconsin pollster, found Mr. Barnes holding a 52-45% advantage over Sen. Ron Johnson in their August 10-15 poll of 713 likely Wisconsin general election voters.

Late last week, Marquette released a new survey (9/6-11; 801 WI registered voters; live interview) and the law school research organization now posts Sen. Johnson to a slight 48-47% advantage. Civiqs, polling for the Daily Kos Election site (9/10-13; 780 WI likely general election voters), confirms the Marquette result. They find Sen. Johnson up 49-48%. Though his leads are small, the Johnson trend line is positive.

HOUSE

FL-2: When the Florida redistricting map was adopted, most agreed the incumbent getting the worst draw was three-term Rep. Al Lawson (D-Tallahassee), who saw his Tallahassee-to-Jacksonville 5th District split into several parts. Left with tough choices, Rep. Lawson chose to seek re-election against Republican incumbent Neal Dunn (R-Panama City) in the new 2nd District.

The FiveThirtyEight data organization rates this seat, which stretches from Tallahassee to the Emerald Coast, as R+17. The Dave’s Redistricting App data group calculates the partisan lean as 54.5R – 43.8D.

A new David Binder Research (D) poll (9/14/18; 600 FL-2 likely general election voters; live interview & online) finds Rep. Dunn holding only a 49-43% lead, however, which is a closer result than one would expect from a district with such strong Republican base numbers.

IA-3: In one of America’s tightest congressional districts, Rep. Cindy Axne’s (D-Des Moines) campaign just made an interesting move. The Congresswoman’s political leadership released Rep. Axne’s new internal Impact Research survey (9/7-11; 500 IA-3 likely voters; live interview & text) that reports she and her Republican challenger, state Sen. Zach Nunn (R-Bondurant), are tied at 47% apiece.

The point of releasing the poll, however, is to show emphasis on the abortion issue among the respondents, which the campaign strategists believe will swing voters to the Democratic incumbent. Even when knowing Sen. Nunn’s abortion position, however, the best Rep. Axne can do is tie, suggesting that despite deep disagreements over the issue in the central Iowa region it does not appear to be bringing any more voters into Axne’s camp. Her 47% support figure quoted in this poll is consistent with her two 49% victory percentages in 2020 and 2018.

OR-5: The Democratic survey research firm Global Strategy Group, polling for the 314 Action super PAC (9/1-8; 400 OR-5 likely general election voters) finds Democrat Jamie McLeod-Skinner, who defeated Rep. Kurt Schrader (D-Canby) in the May primary election, leading businesswoman and former local mayor Lori Chavez-DeRemer (R), by a tight 41-38% margin.

PA-8: In what is appearing to be a classic example of a Democratic incumbent claiming independence but seeing Republican forces producing stats showing total compliance with the Biden agenda, the people of Pennsylvania’s northeast 8th Congressional District are dividing evenly. The Republican polling entity, Cygnal, surveying for the Jim Bognet campaign (9/6-8; 440 PA-8 likely general election voters), finds the two candidates, Rep. Matt Cartwright (D-Moosic/Scranton) and Mr. Bognet, tied at 48-48%.

At a R+8 partisan rating according to the FiveThirtyEight polling organization, PA-8 is the second most Republican district in the country that elects a Democrat to the House.

WA-3: In late August, Expedition Strategies released a survey (8/19-20; 400 WA-3 likely general election voters) that was cause for concern among local southwest Washington GOP activists and supporters. After Republican Joe Kent and Democrat Marie Gluesenkamp Perez denied Rep. Jaime Herrera Beutler (R-Battle Ground) advancement into the general election from the August 2nd jungle primary, ES released their survey that gave the Democrat a 47-45% lead in the general election.

Democratic pollster Public Policy Polling, surveying for the Northwest Progressive Institute, (9/19-20; 834 WA-3 voters; live interview & text) now projects Mr. Kent to have overtaken Ms. Perez with a 47-44% slight margin. The WA-3 race is a must-win for the GOP if they are to reclaim the House majority, so this race merits further national attention.

GOVERNOR

Florida: We haven’t seen a Florida Governor’s poll in weeks that showed enough change to report upon, but late this week two such surveys were almost simultaneously released. Both largely confirmed that Gov. Ron DeSantis (R) has a lead beyond the polling margin of error.

Civiqs, polling for the Daily Kos Elections site (9/17-20; 617 FL likely general election voters; online), posts the Governor to a 52-45% advantage over former Governor and recently resigned Congressman Charlie Crist (D). Suffolk University (9/15-18; 500 FL likely general election voters; live interview) derived similar results. They project the Governor’s lead over Mr. Crist to be 48-41%.

Georgia: The aforementioned Atlanta Journal-Constitution/ University of Georgia poll (see Georgia Senate above) also tested the state’s hot Governor’s race. Gov. Brian Kemp (R) has been performing strongly in the polls since his landside 74-22% victory over former US Senator David Perdue in the May Republican primary. The AJC/UGA numbers give the Governor a 50-42% advantage beyond the polling margin of error over former state House Minority Leader and 2018 gubernatorial nominee Stacey Abrams (D).

Minnesota: In a race where the polling has been inconsistent during the past few months, Mason-Dixon Polling & Strategy has released a new ballot test result from their research study conducted for the Minneapolis Star Review and Minnesota Public Radio (9/12-14; 800 MN likely general election voters; live interview). The M-D conclusion finds Gov. Tim Walz (D) leading former state Sen. Scott Jensen (R), 48-41%.

Ohio: We are seeing places around the country where pollsters are producing very diverse ballot test results even when testing an electorate within the same time realm. The Ohio Governor’s race is another such example. A Civiqs organization poll, surveying for the Daily Kos Elections site (9/10-13; 780 OH likely general election voters; online) projects a close race developing between Gov. Mike DeWine (R) and Dayton Mayor Nan Whaley (D). The Civiqs ballot test projects Gov. DeWine to hold only a 44-41% edge.

Emerson College, however, sees a much different margin when polling within exactly the same time frame. Their poll (9/10-13; 1,000 OH likely general election voters; multiple sampling techniques) yields the Governor a wide 50-33% spread over Mayor Whaley. The latter poll result is more consistent with other publicly released surveys for this campaign.

Oregon: One of the more interesting gubernatorial campaigns is found in the Beaver State of Oregon. The fact that Independent candidate Betsy Johnson, a former Democratic state Senator, has a legitimate chance to win the race is what makes this campaign unique in the 2022 election cycle. Ms. Johnson has done better in fundraising than either Democratic nominee Tina Kotek, the former state House Speaker, and Republican former state House Minority Leader Catherine Drazan. She is also competitive with the two major party nominees in the various statewide polls that have been conducted.

Thus, Green Party nominee Nathalie Paravicini dropping out of the race and endorsing Ms. Kotek, as she did this week, actually becomes significant. The race has the potential of splitting close to evenly among the three candidates, meaning each has a legitimate chance to win. The Green Party candidate, even with only a percentage point or two of support, encouraging her voters to back Kotek could prove significant in the final count on election night.