This week’s roundup features news of the Senate banking bill as it moves closer to a vote, insights about cybersecurity from the co-directors of the SEC’s Enforcement Division, and an update on when businesses can expect guidance from the IRS on pass-through income.
Senate Banking Bill Headed for a House Vote
The Senate banking bill that ACG has been following for quite some time is poised for a floor vote next week, The Washington Post reports. Previously held back by House Financial Services Committee Chairman Jeb Hensarling’s desire to include a variety of other provisions in the package, the same version of the bill that was passed in the Senate will now be voted on without any additions.
One point of interest is that the bill would exempt from the Volcker Rule banks with less than $10 billion in total assets and less than 5 percent of total consolidated assets in trading assets and liabilities, allowing them to invest in private equity and hedge funds. For more information on what the bill contains, please see our earlier report.
Axios has previously highlighted one of the drivers behind the bill: “Over years of fly-ins and other Capitol visits, bankers from around the country provided lawmakers with data-rich, fact-based, artful arguments.”
ACG Global offers its members the opportunity to present “data-rich, fact-based, artful arguments” to legislators on policies that can strongly incentivize middle-market growth. Consider attending ACG Global’s 2018 Public Policy Summit to play an important role in helping Congress understand the unique value of the middle market in growing jobs and boosting the economy.
ACG Global offers its members the opportunity to present “data-rich, fact-based, artful arguments” to legislators on policies that can strongly incentivize middle-market growth.
“Volcker Rule 2.0”
Bloomberg reports that regulators are in the process of overhauling the Volcker Rule. One key point that was leaked was the intention to drop the idea that any trade held by a bank for less than 60 days is automatically “speculative,” and as such, banned. It is expected that regulators will attempt to streamline both the rule and the enforcement process.
SEC Enforcement Oversight Hearing in the Capital Markets Subcommittee
The Capital Markets Subcommittee of the House Financial Services Committee held a hearing with Stephanie Avakian and Steven Peikin, co-directors of the SEC’s Enforcement Division, on Wednesday. Although much of the hearing surrounded initial coin offerings, or ICOs, cybersecurity enforcement was also discussed.
Specifically, Rep. Hultgren, an Illinois Republican, asked how the SEC evaluates a company’s cybersecurity practices in order to determine if there is any negligence. According to Peikin, the Enforcement Division looks at disclosures, but it will generally only pursue enforcement actions in egregious instances where a company has abdicated responsibility. The subcommittee also asked questions about the impact of the Kokesh v. SEC Supreme Court decision concerning SEC disgorgement orders, the SEC’s use of administrative judges, the “Share Class Disclosure Initiative,” the volume of recent enforcement actions and forced arbitration.
Ways and Means Committee Holds Tax Reform Hearing
The House Ways and Means Committee held the first installment of its Hearing Series on Tax Reform: Growing Our Economy and Creating Jobs, designed to explore the effects of tax reform. The hearing covered several topics, including the effects of the full expensing of capital expenditures, whether individuals are seeing positive effects from tax reform, GDP and wage growth, corporate share buybacks, and the effect of the tax reform package on the national debt.
Pass-Through Income Guidance
Included as part of the GOP tax law passed last year, the pass-through income deduction of 20 percent has yet to be fully codified by way of IRS guidance.
David Kautter, assistant treasury secretary for tax policy as well as IRS commissioner, told the American Bankers Association to expect such guidance by the middle of August, Politico reports. However, Kautter did make a point of saying that the guidance “won’t cover everything or every question that taxpayers have.” It is possible that the announcement will be a notice of proposed rulemaking, which would be followed by guidance in December, aligning with the White House budget office’s statements to expect the release of pass-through guidance by then.
Maria Wolvin is ACG Global’s vice president and senior counsel, public policy.
Ben Marsico is ACG Global’s manager of legislative and regulatory affairs.