FSOC annual report focuses on climate risk

Welcome Tom Feeney
We are delighted to welcome former U.S. Representative and Speaker of the Florida House of Representatives Thomas C. Feeney, III to GrayRobinson’s Washington office. Tom has been a practicing attorney for more than 40 years. He served five terms in the Florida House of Representatives, leaving the office of Speaker of the House to take a seat in the US House of Representatives in 2003. He has served as President and CEO of Associated Industries of Florida (AIF) for the last ten years, and was previously a senior visiting fellow with the Heritage Foundation. We are delighted to have his expertise and experience at 99 M Street.

FSOC annual report focuses on climate risk
Secretary of the Treasury Janet Yellen appeared before the Senate Banking Committee and the House Financial Services Committee this week to deliver the Annual Report of the Financial Stability Oversight Council (FSOC), which was finalized at the end of 2021, before the Russian invasion of Ukraine. The report identified several priorities for addressing risks and vulnerabilities in the US financial system, with climate change topping that list. Republicans on both sides of the Hill challenged that ranking. Senator Patrick Toomey (R-PA), the Committee’s ranking member, argued that cybersecurity was a more serious and immediate threat to financial stability. Senator Elizabeth Warren (D-MA) urged Secretary Yellen to repeal the Council’s 2019 guidelines that set activities-based criteria for measuring systemic risk; Yellen said they were looking closely at these guidelines. Yellen also said that FSOC would be publishing its anticipated report on the systemic risks posed by digital assets “soon.”

Fudge describes HUD efforts to address affordable housing shortage
In hearings before Senate Appropriations and House Appropriations Subcommittees this week, Secretary of Housing and Urban Development Marcia L. Fudge said that the nationwide lack of affordable housing was a crisis the federal government could not solve alone. HUD’s proposed budget for FY 2023 wants to make funding available to build 500,000 new housing units over the next few years, but state and local governments must be ready to take advantage of that funding. HUD has been working with state housing finance agencies to make construction financing more affordable for builders, and the budget calls for an increase in the Housing Trust Fund and a higher cap on Low Income Housing Tax Credits, which should attract more private investors. Secretary Fudge said that manufactured housing was a promising solution to housing shortages in many parts of the country. HUD is working through the Interagency Manufactured Housing Task Force to expand access to housing finance for manufactured homebuyers, and to clarify questions about title for these properties.

Buttigieg discusses project funding, FY2023 budget with House panel
The House Appropriations Subcommittee on Transportation, Housing & Urban Development, and Related Issues also heard from Secretary of Transportation Pete Buttigieg this week about plans to implement the Infrastructure Investment and Jobs Act (IIJA) and the agency’s budget request for next year. DOT is asking for $142 billion in funding for next year, including $36.8 billion in advance appropriations provided by the IIJA. Subcommittee members asked Secretary Buttigieg about the agency’s capacity to manage the sheer volume of funding under its jurisdiction. Buttigieg described the progress DOT had made in organizing the distribution of funds, including the creation of a website that lists current and upcoming funding opportunities under the IIJA. Workforce requirements are a challenge across the industry and for the Department as well; Buttigieg said they are hiring engineers, program analysts, and a wide range of specialists. Members on opposite sides of the aisle disagreed about the Department’s emphasis on transitioning to electric vehicles, but Buttigieg said it was critically important in order to meet climate goals, and would ultimately save American households a great deal in fuel costs.

SEC extends and reopens comment periods on climate disclosures, private fund advisers, Reg ATS
The Securities and Exchange Commission (SEC) announced on Monday that it would extend the period for public comments on its proposed rule to enhance and standardize climate-related disclosures to June 17. The agency has also reopened the comment periods on proposed rules to enhance private fund investor protection and to include significant Treasury markets platform in Regulation ATS for 30 days. SEC Chair Gary Gensler said, “Commenters with diverse views have noted that they would benefit from additional time,” and that the SEC “benefits greatly” from receiving these comments.

Fair lending requirements do not end with loan approval, says CFPB
The Consumer Financial Protection Bureau (CFPB) issued an advisory opinion on Monday to clarify that the Equal Credit Opportunity Act (ECOA) applies to the entirety of a lender’s relationship with a borrower, not just the application process. “Anti-discrimination protections do not vanish once a customer obtains a loan,” said CFPB Director Rohit Chopra in announcing the opinion. For example, lenders may not discriminate against borrowers by lowering their credit limits or taking more aggressive collections actions on a prohibited basis such as race. Lenders must also provide “adverse action notices” to borrowers whenever credit is denied, an account is terminated, or an account’s terms and conditions change.

Regulators issue updated guidance on flood insurance
The Office of the Comptroller of the Currency, Federal Reserve System, Federal Deposit Insurance Corporation, Farm Credit Administration, and National Credit Union Administration released updated interagency questions and answers on flood insurance this week. The revised guidance consolidates earlier sets of questions and answers proposed in July 2020 and March 2021. It answers questions raised by the enactments of the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act, enacted in 2014. The questions address the escrow of flood insurance premiums, the detached structure exemption to the mandatory purchase requirement, and procedures for force-placement of flood insurance.

Confirmations, Nominations, Departures

The Senate confirmed the nominations of Dr. Lisa Cook and Dr. Philip Jefferson to be members of the Federal Reserve Board, and confirmed the nomination of Jerome H. Powell to a new term as the Board’s Chair. With the earlier confirmation of Dr. Lael Brainard, the Fed’s board has only one vacancy; President Biden urged the Senate to move quickly on his nomination of Michael Barr to be Vice Chair for Supervision.

Rep. Kai Kahele (D-HI) announced that he is running for Governor, and will not seek a second term in the House of Representatives.

Rep. Tom Reed (R-NY) resigned his seat in the wake of sexual harassment allegations.

The Week Ahead

Congress has its hands full before taking its Memorial Day break at the end of the month. And yet the House Intelligence Subcommittee on Counterterrorism, Counterintelligence, and Counterproliferation has schedule a hearing on Tuesday, May 17 to examine reports of “unidentified aerial phenomena” — that is, UFOs. The truth is out there.

May 17 at 12:00 pm House Committee on Financial Services marks up nine bills, including HR 5912, the Close the ILC Loophole Act, sponsored by Rep. Chuy Garcia (D-IL).

May 18 at 10:00 am House Appropriations Subcommittee on Financial Services and General Government holds a hearing on the FY 2023 budget request of the Federal Trade Commission and the Securities and Exchange Commission.

May 18 at 10:00 am Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “Addressing Climate Change with Energy-Efficient and Resilient Housing.” This hearing had originally been scheduled for May 12.

May 19 at 10:00 am Senate Banking Committee holds a hearing on the nominations of Michael Barr to be a member and Vice Chairman for Supervision of the Federal Reserve Board; Jaime E. Lizáragga to be a member of the Securities and Exchange Commission; and Mark Toshiro Uyeda to be a member of the Securities and Exchange Commission.

The Ellis Insight - Jim Ellis on political news

PRIMARIES - May 10 RESULTS

Nebraska: The media is leading with the point that former President Donald Trump’s Nebraska gubernatorial candidate, rancher and company CEO Chuck Herbster, lost his primary battle to rancher and University of Nebraska Regent Jim Pillen. The fact that eight women, including a state Senator, accused Mr. Herbster of sexual harassment long after the Trump endorsement was announced likely was the more critical factor in explaining how the race ended.

Mr. Pillen defeated Mr. Herbster and Omaha state Sen. Brett Lindstrom in a close 33-30-26% result to claim the Republican nomination. He will be a heavy favorite in November against the new Democratic nominee, Bellevue state Sen. Carol Blood. Republican turnout was up approximately 53% when compared with the 2018 midterm election. Democrats also increased their participation rate but only in the 6% range.

Both party endorsed candidates easily won their respective congressional nominations in the vacant 1st District. Norfolk state Sen. Mike Flood captured the Republican nomination with 73%, and Lincoln state Sen. Patty Pansing Brooks became her party’s nominee with an 87% score. The two will square off in a June 28 special election to fill the unexpired portion of the current term.

Former Rep. Jeff Fortenberry (R-Lincoln) resigned his seat at the end of March after being convicted for campaign finance violations in a California court. Regardless of how the special ends, both Sens. Flood and Pansing Brooks will face each other in the regular general election.

US Reps. Don Bacon (R-Papillion/Omaha) and Adrian Smith (R-Gering) were easily re-nominated in their respective primary elections. Both posted over 75% of the vote. Mr. Bacon, in a competitive 2nd District, will now face Omaha state Senator Tony Vargas while Rep. Smith drew farmer David Else as his general election opponent in the expansive 3rd CD. The NE-3 seat stretches the width of Nebraska from the Wyoming border on the west all the way to the Iowa state line in the east.

West Virginia: In the first of potentially six incumbent paired contests of the 2022 post-redistricting election cycle, US Rep. Alex Mooney (R-Charles Town) scored a double-digit win over fellow Congressman David McKinley (R-Wheeling). West Virginia lost one of its three seats in reapportionment, hence the reason for the two Republicans facing each other.

All of Rep. McKinley’s current district was contained in the new 2nd, but only half of Mr. Mooney’s territory. Former President Donald Trump backed Rep. Mooney after McKinley voted for the Biden infrastructure package, which appeared to even the advantages. With polling correctly projecting a Mooney win, the four-term West Virginia Congressman who previously served in the Maryland state Senate recorded a convincing 54-36% victory.

SENATE

Alabama: It appears that analyses of US Rep. Mo Brooks’s (R-Huntsville) Senate campaign being dead in the water after former President Trump pulled his earlier endorsement have proven incorrect. Three new surveys point to Rep. Brooks rebounding to the point of again becoming competitive for the second runoff position from the May 24 primary. The Republican primary is among Mr. Brooks, former Business Council of Alabama President & CEO Katie Britt, and businessman and former “Black Hawk Down” pilot Mike Durant.

The Moore Information Group (5/2-5; 400 AL likely Republican primary voters; live interview) finds Ms. Britt leading the field with 27%, followed by Rep. Brooks and Mr. Durant in a tie at 20% apiece for the second runoff position. McLaughlin & Associates (5/2-5; 500 AL likely Republican primary voters; live interview & text) gives Ms. Britt a larger lead at 37% before projecting Mr. Durant in second place with 27% and Rep. Brooks closely trailing at 22%.

A Cygnal group poll for the Alabama Daily News and Gray Television (5/6-7; 600 AL likely Republican primary voters) also sees Ms. Britt topping Brooks and Durant, 32-23-21%. In Alabama, if no one reaches the 50% mark in this year’s May 24 primary, the top two finishers will advance to a runoff election on June 21.

Missouri: Resigned Gov. Eric Greitens (R), attempting to rebound from domestic and child abuse accusations from his ex-wife, released an internal Fabrizio Lee & Associates survey. The poll, conducted for the Greitens campaign (5/2-4; 806 MO likely Republican primary voters), projects the candidate leading the group of Republicans, but with only 26% of the vote. Trailing are US Rep. Vicky Hartzler (R-Harrisonville/ Columbia) with 19% and Attorney General Eric Schmitt with 14%. Four previous polls all showed Mr. Greitens trailing.

Pennsylvania: Two new surveys find the Pennsylvania Senate Republican primary turning into a three-way race within the last week prior to the May 17 primary election. Pennsylvania has no runoff system, so whoever garners the most votes, regardless of percentage attained, wins.

The Trafalgar Group (5/6-8; 1,080 PA likely Republican primary voters; culled from a large sample through live interview; interactive voice response system, email and text) finds television Dr. Mehmet Oz leading the candidate field with newcomer Kathy Barnette, an Army veteran and 2020 congressional nominee, placing second ahead of former hedge fund CEO David McCormick. The respondents split 24.5 - 23.2 - 21.6%. Insider Advantage, polling for Fox29 (released 5/10; 750 PA likely GOP primary voters) produced similar numbers: Oz 22.5%; Barnette 20.9%; and McCormick 18.5%.

HOUSE

AK-AL: The Alaska Survey Research firm, headed by long-time local pollster Ivan Moore, released their new special election US House study featuring 48 candidates. The survey (5/6-9; 605 AK-AL likely special election voters; online) finds former Governor and 2008 Vice Presidential Republican nominee Sarah Palin leading the huge field with 19%, followed closely by officially endorsed Republican Party candidate Nick Begich, III at 16%, with Independent and former 2020 Democratic US Senate nominee Al Gross and North Pole City Councilman Santa Claus (the former Thomas O’Connor) capturing the third and fourth qualifying positions with 13 and 6%, respectively.

Under the new Alaska election law, the top four finishers from the jungle primary, in this case scheduled for June 11, will advance to the August 16 special general election. If no one receives majority support among the finishing four in the succeeding vote, the Ranked Choice Voting System takes effect. It is here where Ms. Palin may find trouble. Under this configuration, ASR projects that Mr. Claus would be first eliminated, then Ms. Palin in the next round. A Begich-Gross final round would favor Mr. Begich at 53-47%.

GA-14: Rep. Marjorie Taylor Greene (R-Rome) was cleared of insurrection charges, and subsequently awarded a ballot position as she seeks a second term in the House. Left of center forces were challenging Ms. Greene’s status because of what they said was her role in the January 6 US Capitol protest. Ms. Greene faces five Republican primary opponents on May 24.

The likely Democratic nominee is Army veteran Marcus Flowers who had raised over $7 million for the contest, but showed only $1.9 million remaining in his account on March 31. Mr. Flowers will need all of these funds and then some, since the new GA-14 is rated R+45.

HI-2: Coming as no surprise since four elected or formerly elected Democratic officials had already declared their candidacy for what they knew would become an open congressional seat, freshman US Rep. Kai Kahele (D-Hilo) made public this week his intention to run for Governor and not re-election to the House this year.  

The Kahele decision means a minimum of 61 seats will be open for the 2022 election. The Congressman enters a Democratic gubernatorial primary where Lt. Gov. Josh Green enjoys large polling leads.

NE-2: Democratic pollster Change Research, polling for the left of center 314 Action group (5/6-10; 564 NE-2 general election voters of whom 94% say are definite or probable voters; online) finds Omaha Democratic state Senator Tony Vargas leading US Rep. Don Bacon (R-Papillion/Omaha), 42-39%, in a survey conducted just before the Nebraska primary. The poll skews slightly left.

Additionally, approximately 25,000 more people voted in the NE-2 Republican primary than Democratic suggesting the enthusiasm level favors the GOP. Furthermore, the seat became three points more Republican in redistricting. Therefore, this particular poll result notwithstanding, Rep. Bacon is still favored for re-election.

NY-19: Rep. Antonio Delgado’s (D-Rhinebeck) appointment as his state’s new Lt. Governor leaves the 19th Congressional District as an open seat. State Sen. Michelle Hinchey (D-Kingston), daughter of the late US Rep. Maurice Hinchey (D) who served 10 terms in the House, had been considering a congressional bid but announced that she would instead seek re-election to the legislature.

This perhaps robs the Democrats of their best potential candidate in a district that could be re-drawn as more favorable to the Republicans when the new court maps are completed by the assigned May 20 deadline.

NC-4: Veteran Tar Heel State US Rep. David Price (D-Chapel Hill) is retiring after serving what will be 34 non-consecutive years in the House. The battle to replace him comes in the Democratic primary in what is rated as a new D+30 district that contains the cities of Durham, Chapel Hill, and Burlington.

An Impact Research survey (4/25-28; 425 NC-4 likely Democratic primary voters; live interview) projects state Sen. Valerie Foushee (D-Chapel Hill) as the race leader with 35% support. Durham County Commissioner Nida Allam is second with 16% preference, and country singer and former congressional candidate Clay Aiken follows with 10%.

REDISTRICTING

Florida: A Florida state judge whom Gov. Ron DeSantis (R) appointed disqualified the new Florida congressional map, ruling that the elimination of Rep. Al Lawson’s (D-Tallahassee) majority minority District 5 violates Florida’s Fair Districts Act. The state will clearly appeal, but the map’s fate, which is the Republicans’ best nationally, is now suspended in political limbo.

GOVERNOR

Alabama: The Cygnal group poll for the Alabama Daily News and Gray Television (5/6-7; 600 AL likely Republican primary voters) also released its data for the state’s gubernatorial campaign. While Gov. Kay Ivey (R) still holds a comfortable lead, she has dropped to 40% support according to this survey. Real Estate developer Tim James, son of former Governor Fob James, is second with 18%, and former US Ambassador to Slovenia Lindy Blanchard is a close third with 15%. Three more candidates divide 14% of the vote, while the remainder is recorded as undecided/won’t say.

There is little doubt that Gov. Ivey will finish first, but the question remains whether she can attain the 50% threshold to avoid being forced into a secondary runoff election. The Alabama primary is May 24. If a runoff becomes necessary, that election would occur on June 21.

New Mexico: Survey USA polling for KOB-TV in Albuquerque (4/29-5/7; 1,389 NM likely general election voters; interactive voice response system and online) tested the upcoming Governor’s race and finds 2020 US Senate Republican nominee and former television weatherman Mark Ronchetti pulling to within the margin of polling error against Gov. Michelle Lujan Grisham (D). The ballot test breaks 47-43% in favor of the incumbent.

More troubling for Gov. Lujan Grisham, however, is her results against the entire Republican field. Paired individually with each of five candidates, Gov. Lujan Grisham, though leading in every scenario, fails to reach 50% against any of her GOP opponents. The cumulative results portend a highly competitive November race.