Photograph by T.J. Kirkpatrick/Getty Images

Sen. Sherrod Brown, center, takes his seat beside Sen. Jon Tester and Sen Robert Menendez, right, before the confirmation hearing of Richard Cordray, nominee for director of the Consumer Financial Protection Bureau, and Mary Jo White, nominee for chair of the U.S. Securities and Exchange Commission, in the Senate Committee on Banking, Housing and Urban Affairs on March 12, 2013 in Washington, DC.

Lawmakers and lobbyists in Washington are busy chewing over the possibility that one of the main advocates of breaking up the big banks could be in the running to take over the Senate Banking Committee in 2015.

The current chairman of that panel, South Dakota Democrat Tim Johnson, will announce tomorrow his plans for next year’s election. A Senate Democrat aide says Johnson is expected to say that he will retire. If the Democrats retain control of the Senate in the 2014 vote, Sherrod Brown, an Ohio Democrat who thinks banks are too large, would be a potential candidate.

Brown isn’t the next Democrat in line by seniority. That would be Jack Reed of Rhode Island. Reed, though, is poised to lead the Armed Services Committee, since its chairman, Carl Levin of Michigan, is also retiring.

Charles Schumer of New York would be next down the list. If he didn’t make a bid for the post, Robert Mendendez of New Jersey follows in seniority. Still, Menendez is already chairman of the Foreign Relations Committee and is the subject of ethics investigations.

Elizabeth Warren, in her first term representing Massachusetts, has already made a mark on the committee as an outspoken critic of the big banks. As a freshman, she wouldn’t have the seniority to lead the panel.

That could leave Brown, who is set to introduce a bill in April that would impose higher capital standards on the largest banks and grant regulatory relief for community banks.

Jaret Seiberg, a senior policy analyst at Washington Research Group, a unit of Guggenheim Securities LLC, said that moves in Congress to curb bank size would be stronger under a Brown committee chairmanship.

“This is setting the stage for the real fight that is going to be after the midterm elections when Senator Brown is a leading candidate to be Banking chairman,” Seiberg said today. “The odds are against them getting to the finish line in this Congress, but it’s a much more real threat in the next.”

Of course, if the Republicans take control of the Senate in 2014 the speculation on the Democratic side is moot. The ranking Republican on the committee, Mike Crapo of Idaho, would be in line to take over.

Perry Plumart, a spokesman for Johnson, said the 66-year-old senator will announce his plans for the 2014 election in a news conference tomorrow. Johnson joined the Senate in 1997.

Original post is Could ‘Break Up the Banks’ Senator Take Johnson’s Spot? by Political Capital.

Photograph by Christopher Polk/Getty Images

Actor Daniel Day-Lewis and wife Rebecca Miller arrive at Hollywood & Highland Center on Feb. 24, 2013 in Hollywood.

Fresh from a mixed Oscars performance, the reanimated spirit of Abraham Lincoln can seek solace today in the 150th birthday celebration kicked off by one of his lesser-known legacies.

While fighting the Civil War and emancipating slaves, the 16th president also found time to breathe life into a federal banking system, starting with the National Currency Act on Feb. 25, 1863. That law led to the establishment of the Office of the Comptroller of the Currency.

Today the OCC, as it’s known, announced with pride the start of a yearlong celebration of its heritage.

“I am especially proud to lead the agency as it achieves this milestone in its distinguished history,” said the OCC’s current chief, Thomas Curry, issuing a huzzah to his agency’s “long heritage of public service.” Recognition will continue at agency events throughout the year.

As with most regulatory efforts, Lincoln’s was born of crisis: a little matter of finding a way to pay for the war. Today’s members of Lincoln’s Republican Party will likely spend the OCC’s sesquicentennial year looking askance at the stiffening of banking regulations provided in the 2010 Dodd-Frank Act.

No word yet on whether Daniel Day-Lewis will be available to blow out candles.

Original post is No Best Picture, but Another Washington Party for Lincoln by Political Capital.

Photograph by Emma Fidel/Bloomberg

Citigroup Executive Vice President Candi Wolff has been escaping Washington, D.C., for her family's Christmas tree farm every year since 1994.

Citigroup Inc. Executive Vice President Candi Wolff can talk about Christmas trees for hours. She can tell you how an electric tree baler works, the difference between a Colorado Blue Spruce and a Douglas Fir, and that tree sales are a year-end economic indicator, although she can’t quite tell you why.

Wolff can also recall the times former Vice President Dick Cheney and former President George W. Bush would phone while she was working on her family’s Christmas tree farm in Round Hill, Virginia.

“I’d say, ‘Hold on, I’m out selling trees, hold on!”’ she said in an interview. “And I’d run somewhere where I could actually have a conversation.”

Wolff, 48, Citigroup’s head of global government affairs and a former assistant to Bush for legislative affairs, has been escaping the Beltway — literally and figuratively — for Snickers Gap Tree Farm every winter since 1994. That’s when she met her hydrogeologist husband, Mark Wolff, whose father started planting trees on the 40-acre farm in 1981.

The mountainside farm 55 miles from the White House provides a welcome break from Wolff’s corner office on Pennsylvania Avenue, she says. There, she directs a staff of 42 and oversees Citi’s relations with more than 100 governments, including the U.S. Aside from the poinsettia on her office coffee table, you might not know that the lobbyist, named one of Washington’s 25 most influential women in 2012 by the National Journal, is also a Christmas tree aficionado.

You won’t know, that is, until she’s “gotten to you” –her phrase for inviting you out to Snickers Gap — as she’s done with many Washington friends over the years.

“I would get my Hill colleagues,” said Wolff, who worked for the Republican Senate Steering Committee and Policy Committee during her first few years of farm visits. “We sort of had this high-priced crowd out there — we were the lawyers or lobbyists.”

In those early days, Wolff helped work the baler, a netting machine, because she had smaller fingers than the farm men and was better at tying knots. Today, Snickers Gap trees have grown too big for her to lift easily, so she sticks to customer-related tasks like refilling the apple cider heater, giving directions and handling the money — a fitting job for someone who has been a bank executive since May 2011.

Wolff says she enjoys interacting with customers, many of them longtime Snickers Gap visitors, and that she finds the retail experience “grounding,” in part because not all the customers know who she is. ”I’m wearing jeans and I’m kind of getting back to the earth, if you will,” Wolff said.

As much as Wolff enjoys the farm, she says she doesn’t mix business with pleasure. She chuckles at the mention of agriculture policy, which she jokes about avoiding while at the White House.

“It was never really my interest,” she said while walking through a plot of firs. “I can do this and this is fun, but I don’t want to understand ag policy.”

Fun it may be, though not exactly relaxing. The choose-and-cut farm, which opens the weekend after the U.S. Thanksgiving holiday, is usually so busy during the first two weekends of December that Wolff doesn’t have time to check her Blackberry until sundown.

This year, Snickers Gap sold out of all but the largest trees early, giving Wolff more time to chat with her family: Her brother-in-law now owns the farm, her niece and nephew run the “Snack Shack,” and her husband and teenage daughters help customers claim their trees from the hillside.

Wolff says the simple human interaction away from Washington’s Scrooges and stress is one of the tree farm’s greatest holiday gifts. ”They’re out there for Christmas,” Wolff said. “For the most part there’s not a bah-humbug mood. Occasionally you get a few Grinches, but most people are just happy to be out there.”

Original post is The Secret (Santa) Life of a Washington Lobbyist by Political Capital.

Photograph by Andrew Harrer/Bloomberg

Representative Jeb Hensarling, a Republican from Texas, right, and Representative Eric Cantor, a Republican from Virginia, during a news conference following a Republican Conference meeting at the Capitol.

Rep. Barney Frank, who spent two years leading the House Financial Services Committee, says incoming chairman Jeb Hensarling of Texas will bring “complete and total irrelevance” to the committee.

“Legislatively, he’s so far out of the mainstream,” Frank, a Massachusetts Democrat, told reporters today.

Republican Hensarling is a sharp critic of the financial regulation law enacted in response to the worst economic downturn since the Great Depression. The law is named, in part, after Frank, in part after former Sen. Chris Dodd.

The incoming chairman voted against the $700 billion bank bailout and supported an audit of the Federal Reserve, and told the Dallas Morning News after he was named as committee chairman that he wanted to phase out the government-backed mortgage giants Fannie Mae and Freddie Mac.

“As a retiring member of the minority party, Congressman Hensarling considers Mr. Frank’s views far less relevant than he once did and wishes him well in his future endeavors,” said Sarah Rozier, a spokeswoman for the incoming chairman.

Original post is Frank’s Frank Hensarling Talk: `Complete and Total Irrelevance’ by Political Capital.

Photograph by Jin Lee/Bloomberg

Vikram Pandit, chief executive officer of Citigroup Inc.

Vikram Pandit’s abrupt departure from Citigroup today is yet another reminder that Wall Street, while healing, is still in a state of existential crisis.

Big questions abound about the future of the big banks in the face of a sluggish global economy and governments across the world looking at those institutions like a teenager who’s just been handed the keys to the car after a long punishment.

Henry McVey, KKR’s head of global macro and asset allocation, put out a 15-page analysis of the financial services industry yesterday and it’s a good read. The observations come from what he dubs his “macro perch” at the well-known private-equity firm that’s more recently branched into real estate, hedge funds and lending.

McVey drops in some amazing stats about Wall Street’s outsized role in the economy five years ago. In the first half of 2007, Citi, Bank of America and JPMorgan had profits of $31.3 billion — a total that was just slightly smaller than the entire materials, telecom and utilities sectors combined.

Today, he sees “an unsettled environment where many of the underpinnings of the sector’s advance are being called into questioned…while deregulation has been replaced by re-regulation.”

McVey takes the last point a step further, in a way that may send chills down the spine of bankers already leery of Washington. He predicts regulation will get more intense still, noting that real implementation of the Volcker Rule — which limits banks’ ability to take risk with their own money — would mirror the schedule of heightened regulation after the stock market crash of 1929.

While McVey doesn’t address it directly, KKR and competitors like Blackstone and Carlyle are among the firms that stand to benefit from more regulation on traditional Wall Street players. KKR, founded more than 35 years ago and long the premiere private equity deal shop, now is in the business of underwriting stock and bond offerings, and even has its own long/short hedge fund.

One of the last sections of the report especially resonates in light of the Pandit news, as McVey zeroes in on what he sees as the key intangible of “leadership.”

New Citi CEO Michael Corbat may arrive with an advantage under the McVey school of thought. He says, “Great leaders inspire their employees to ‘wear the brand,’ using their actions and words to continually reinforce the culture and vision of the organization.”

Corbat, who’s worked at Citi and its predecessors since 1983, described himself in a memo today as “a true believer.”

Original post is From a KKR Perch, More Scrutiny Ahead for Wall Street by Political Capital.

Photograph by Robyn Beck/AFP/Getty Images

'March On Wall Street South' demonstrators protest in Charlotte.

American banks have been reluctant to make political waves in the wake of the 2008 financial crisis. That may be about to change.

In a private conference call with members yesterday, senior officials from the American Bankers Association laid out plans to get into the game that has reshaped the role of money in politics over the past two years.

The Washington trade group, which counts banks such as JPMorgan Chase & Co. among its members, is close to forming a 501(c)(4), a non-profit fundraising unit that will allow the group to keep its donors unknown. The target, according to officials on the call, will be candidates in Senate races around the country.

“There are no limits on donors, no disclosure and immediately overnight they can tap into any number of resources in the industry,” Craig Holman, a lobbyist for Public Citizen, said in an interview. “The real battle when it comes to Congress is the Senate.”

James Ballentine, executive vice president of congressional relations and political affairs, said on the conference call that donation levels for members would vary based on size. The largest firms would be asked for a minimum of $10,000, medium-sized banks $5,000 and the smallest members $1,000.

One of the primary plugs on the call?

Secrecy.

Ballentine and others pointed out multiple times that the banks that donate would not have to disclose their contributions — and that the ABA wouldn’t either. The group would largely operate by sending money to various super political action committees engaged in key Senate races, officials said.

ABA Chief Operating Officer Michael Hunter confirmed the plans and said that, if approved, the nonprofit’s activities will be decided by its board. Not all ABA members are expected to take part.

“It’s not like we’re going to be opening the cash spigots and influencing races across the country,” Hunter said in an interview. Other trade groups fund similar advocacy-focused nonprofits, he said.

Hunter said that if all the trade group’s members contributed at the minimum level, the fund would have a war chest of about $6 million. A more likely scenario, he said, was that 40 percent or 50 percent would give money. Some members also expressed a willingness to give more than the minimum, he said on the call.

Members on the call weren’t shy about voicing concerns that shareholders or clients may have a problem with getting involved with an operation that doesn’t disclose donors.

“That’s why we’ve created an independent entity because we understand the pressure that many of your institutions are under,” Hunter said on the call. “We’ve chosen a structure that allows us to avoid disclosing contributors, so there are a number of security blankets that we hope we develop with respect to this.”

Original post is Bank Group Courting Secret Donors for Senate Campaigns: $6 Million? by Political Capital.

Photograph by Charly Kurz/laif/Redux

Sanford "Sandy" Weill

Sanford Weill is blowing Washington minds.

The former Citigroup CEO who helped engineer the country’s current financial system in the late ’90s says he now thinks investment banks and commercial banks should be split up.

His change of heart voiced on CNBC this week surprised pundits, banking leaders and lawmakers alike.

Frank Keating, president and CEO of the Washington-based American Bankers Association, said he was “dismayed” by Weill’s suggestion.

“It’s time to push the pause button on flawed proposals that would damage the U.S. economy,” Keating said in a statement today.

Karen Shaw Petrou, managing partner and co-founder of Federal Financial Analytics, argued that Weill’s suggestion couldn’t hold water. But first, she called out his about-face.

“Is Sandy Weill Wall Street’s Alfred Nobel, who took his then-untold millions earned by arms trafficking and created an eponymous peace prize?” she wrote in a memo to clients today. “Or is he more like a madam who, recanting profitable sins, heads to a comfortable convent populated by society’s nicest ladies?”

Former Senator Chris Dodd and Representative Barney Frank, after whom the 2010 financial overhaul was named, both criticized Weill’s comments on CNBC. His suggestion is poorly timed and unnecessary given the Dodd-Frank Act’s restrictions on proprietary trading known as the Volcker rule, Frank said yesterday.

Weill’s endorsement of bank breakups was hailed as “good news”  by Senator Sherrod Brown. The Ohio Democrat is having trouble getting traction for a bill he introduced in May that would limit the size of banks.

“People who understand what’s happening with banks realize that these banks are too big to fail, too big to manage and too big to regulate,” Brown said in an interview yesterday.

Senator Robert Corker, Brown’s colleague on the Senate Banking Committee, said overseers’ ability to regulate banks has always been questionable, but Weill’s star power gives his remarks some kick.

“It’s just not possible to regulate in such a way that risk that’s concentrated in this way is mitigated,” the Tennessee Republican said in an interview yesterday. “I think people are looking at a lot of things, stronger capital. But I do think coming from someone like this makes it interesting and probably causes people to focus more on what he’s saying.”

Lawmakers hope to reach a decision on the Volcker rule by the end of the year, so Weill might have to wait a while for another banking overhaul.

Original post is Banking’s Sandy Weill: Latter-Day Nobel Playing with Dynamite? by Political Capital.

Photograph by Pete Marovich/Zuma Press

Sen. John McCain

For years, John McCain’s name was synonymous with campaign finance reform.

Bruised by his exposure to a scandal in his early years as a senator involving Arizona businessman Charles Keating, a generous campaign contributor who sought help with federal banking regulators as his Lincoln Savings and Loan was going down, McCain emerged as a fervent advocate of restricting big donors. He and former Senator Russell Feingold of Wisconsin succeeded in reeling in “soft money.”

Yet now the Republican senator and 2008 presidential nominee who was known for bucking his own party has aligned with party efforts to block requirements that nonprofit groups spending millions to elect Republicans reveal their donors.

McCain yesterday joined a Republican filibuster to prevent the Senate from voting on the Disclose Act and will do so again today. The legislation would require nonprofits like the U.S. Chamber of Commerce, Crossroads GPS and Priorities USA, the nonprofit founded by former aides to President Barack Obama, to tell the public who’s funding the ads they are seeing on television.

“In its current form, the Disclose Act is closer to a clever attempt at political gamesmanship than actual reform,” McCain said on the Senate floor. “By conveniently setting high thresholds for reporting requirements, the Disclose Act forces some entities to inform the public about the origins of their financial support, while allowing others – most notably those affiliated with organized labor – to fly below the Federal Election Commission’s regulatory radar.”

The threshold McCain cites — contributions of less than $10,000 need not be reported — is designed to prevent membership groups like the National Rifle Association from having to disclose all of their dues-paying members.

And while the individual who pays $100 a month to his or her union won’t be publicly identified, neither will the small business who pays $5,000 a year to be part of the National Federation of Independent Business. The $10,000 threshold was designed to capture the huge givers to these nonprofits, not small donors, the same way contributors of $200 or less to political campaigns don’t have to be identified.

Despite the concerns raised about labor unions, business interests have given 15 times more money to campaigns, PACs and outside groups than organized labor so far for the 2012 election, according to the Center for Responsive Politics.

McCain went on to say that “one can easily see that a major scandal is not far off. And there will be a scandal. Mark my words there will be one. The American people know it and I know it.”

McCain, for his part, is mindful of  avoiding scandal.

Twenty five years ago, Charles H Keating Jr. was seeking help as the government moved to seize Lincoln Savings and Loan, a subsidiary of his American Continental Corp. He called on Senator Dennis DeConcini, an Arizona Democrat who had collected thousands of dollars for his campaigns from Keating. He wanted a meeting with regulators, which DeConcini arranged, along with five members of Congress.

Keating had supported McCain early on as well, holding a fund-raiser for him in his first campaign for the U.S. House in 1982, collecting more than $11,000 from 40 employees of American Continental Corp. In 1983, as McCain readied for re-election, Keating hosted a $1,000-a-plate dinner for him.  When McCain ran for the Senate in 1986, Keating delivered more than $50,000.

Starting in April 1987, Keating met with federal regulators and five senators: DeConcini’, McCain, Alan Cranston of California, John Glenn of Ohio and Don Riegle of Michigan. As a group, they had collected $1.3 million from Keating for campaigns — and later become known as “The Keating Five.”

Original post is McCain: ‘Mark my Words’ — Campaign Finance ‘Scandal Not Far’ by Political Capital.

Photograph by David Paul Morris/Bloomberg

An automated teller machine (ATM) in San Francisco.

Call it a sign of the regulatory times:

Banks want relief from a requirement to post signs on automated teller machines advising customers of the fee they’ll pay for a transaction.

That relief is called H.R. 4367.

Chris Strohm reports for Bloomberg Government’s Congress Tracker that the law as it stands requires banks and credit unions to give consumers two notices that they face fees if they’re not using their own banks’ ATMs. It’s in the Electronic Fund Transfer Act:

One notice must be physically placed on the face of the machine; the other displayed electronically on the ATM screen or on a paper notice issued after a transaction.

The law also makes banks liable for as much as $500,000 in class-action lawsuits for failure to post signs — which makes thefts of signs by mischief makers a potentially big problem — according to a committee report on the bill. Aggrieved individuals can collect as much as $1,000 per transaction — which takes a lot of ATM fees to cover.

“Repealing this outdated and unnecessary duplicative requirement would cause no harm to consumers,” says House Financial Services Committee Chairman Spencer Bachus. “They would still be notified on the ATM screen of any fees and still have the ability to decline those fees and terminate the transaction.”

Here’s no surprise, as Strohm reports:

The bill is backed by the American Bankers Association, the Independent Community Bankers of America, the ATM Industry Association, the American Gaming Association, the Consumers Bankers Association, the Credit Union National Association, the Electronic Funds Transfer Association, the Food Marketing Institute, the National Association of Convenience Stores and the National Association of Federal Credit Unions.

Original post is The Owner of This ATM May Charge You an Added $3 Fee Per Transaction by Political Capital.

Photograph by Andrew Harrer/Bloomberg

Jamie Dimon, chief executive officer of JPMorgan Chase & Co., at a Senate Banking Committee hearing in Washington on June 13, 2012.

JPMorgan Chase & Co. CEO Jamie Dimon returns to Capitol Hill today at 9:30 a.m. to testify at a House Financial Services Committee hearing. Dimon, who appeared before the Senate Banking Committee on June 13, may face questions from lawmakers over whether the bank’s loss of at least $2 billion might have been prevented by the Volcker rule ban on proprietary trading.

Federal Open Market Committee policy makers begin a two-day meeting to decide on interest rates at 10 a.m. Federal Reserve Chairman Ben S. Bernanke said June 7 that Europe’s situation poses “significant risks” to the U.S. economy and that the central bank “remains prepared” to take action if necessary.

The Group of 20 nations will urge euro-area governments to take all steps necessary to protect their currency union, according to an excerpt of a draft of the statement that leaders will issue at the end of their two-day summit today in Mexico. Leaders including President Barack Obama will hold press conferences later today.

And the Senate Health Committee holds a hearing on the impact of Title IX, with testimony from Billie Jean King, winner of 11 Grand Slam mixed doubles titles among many other tennis triumphs.

Original post is Washington Daybook: Second Time Around by Political Capital.