November 2, 2018
HUD announces decline in veterans’ homelessness — Let’s start with a little good news. The Department of Housing and Urban Development announced this week that homelessness among veterans declined in 2017, from 40,020 at the beginning of 2017 to 37,878 at the beginning of 2018. The number of homeless veterans has declined by nearly half over the past ten years, which HUD and the Veterans Administration attributed in large part to the HUD-VASH voucher program created in 2008.
Federal Reserve proposes changes to tailor prudential standards — The Federal Reserve Board voted Wednesday to seek public comment on a framework for tailoring prudential standards to the risk profile of large banking institutions, as required by the Economic Growth, Regulatory Reform, and Consumer Protection Act (EGRRCPA). The Fed’s proposed framework extends regulatory relief not only to firms with assets between $100 billion and $250 billion, but to larger institutions that are not classified as global systemically important banks (GSIBs), as well. Banking organizations between $100 billion and $250 billion would no longer be subject to standardized liquidity requirements, nor would they have to conduct their own stress tests. Banks above that size that are not GSIBs would remain subject to certain enhanced liquidity standards, but would have their standardized liquidity requirements reduced to reflect their more stable funding profile. Comments on the proposal are due to the Fed by January 22, 2019.
Fed finalizes new supervisory ratings for large financial institutions — The Federal Reserve Board announced today that it has finalized a new supervisory ratings system for large financial institutions (LFIs) — depository institutions with more than $100 billion in assets — that align more closely with the Fed’s supervisory program. While the Fed will continue to use the RFI system (which evaluates risk management, financial condition, and the impact of nondepository affiliates on depository institutions) for community and regional banks, the new system for large financial institutions will assign ratings for capital planning and positions; liquidity risk management and positions; and governance and controls. Ratings will be four non-numeric categories: Broadly Meets Expectations, Conditionally Meets Expectations, Deficient-1, and Deficient-2. Because of the Fed’s work on tailoring the application of enhanced prudential standards to holding companies with assets of $100 billion or more, the Fed will not begin using the new LFI rating system until 2020.
SEC enforcement actions, fines rise in FY 2018 — While “quantitative metrics . . . cannot adequately measure the effectiveness of an enforcement program,” the SEC Co-Directors of Enforcement warned, the Division brought more enforcement actions and imposed more in fines and disgorgements this year than in the last fiscal year, according to a report released today. The Securities and Exchange Commission brought a total of 821 enforcement actions, and returned $794 million to harmed investors, from a total of more than $3.945 billion in disgorgement and penalties. The Division reported that the Supreme Court’s decision in Kokesh v. SEC, which found that disgorgement penalties are subject to a five-year statute of limitations, “may cause the Commission to forgo up to approximately $900 million in dis- gorgement, of which a substantial amount likely could have been returned to retail investors.”
Fannie, Freddie report strong earnings, return $6.7 billion to Treasury — The government-sponsored housing enterprises reported third-quarter earnings today, both showing strong improvements from 2017. Freddie Mac reported net income of $2.7 billion, an increase from the second quarter’s $2.4 billion, while Fannie Mae’s $4.0 billion was lower than its second-quarter net income of $4.6 billion. The two GSEs remain in conservatorship, so will pay those net earnings as dividends to the Treasury. Over ten years of conservatorship, Fannie Mae has paid the Treasury $171.8 billion, while Freddie Mac has paid a total of $114 billion.
AZ accepts first fintech “sandbox” participant — The Arizona Attorney General announced the first participant in the state’s fintech sandbox in mid-October: Om Cash, a subsidiary of Omni Mobile Inc. that is testing payments through a centralized wallet infrastructure at Tucson’s Westward Look Wyndham Grand Resort. The sandbox allows participants to obtain limited access to Arizona’s market to test innovative financial products or services without full licensing. Om Cash will have two years to test its product in the sandbox. Arizona became the first state in the country to create a fintech sandbox, in March of this year. The sandbox is a function of the state Attorney General’s office, not the Department of Financial Institutions, and the AG’s office opened for applications in August.
Next Week in Washington:
November 6: Election Day. While you’ve probably spent a lot of time thinking about your ballot—or might even have voted—already, Vote411.org (the League of Women Voters) is a handy site for personalized poll information, and Ballotpedia.org (from the Encyclopedia of American Politics) is a great resource for information about down-ballot choices, including initiatives/referenda.
The Ellis Insight. Jim Ellis reports on political news:
Democrats: Last week, New York Sen. Kirsten Gillibrand (D), seeking re-election this year but believed to be a potential 2020 presidential candidate, made several statements pledging to serve her full six-year term if winning again on November 6th. Early this week, she partially walked those comments back, saying that she would make any serious decision regarding a 2020 national campaign after the midterm elections.
Hillary Clinton, responding to speculation that she might again become a presidential candidate, apparently is not closing the door on such an effort. According to a New York Times story, Ms. Clinton at first ruled out running again in an interview with another journalist, but then began to hedge and stated that she would “like to be President.”
California: Two new California statewide polls again show Democratic challenger Kevin de Leon, a Los Angeles state Senator, pulling into range of veteran incumbent Sen. Dianne Feinstein in the double-Democratic general election. According to Probolsky Research, a frequent California pollster, Sen. Feinstein leads Mr. de Leon only 41-35% in their most recent study (10/25-30; 900 CA registered voters). Mr. de Leon, however, has little in the way of resources to compete in this most expensive of political states.
The second poll comes from the University of California at Berkeley. This study (10/19-25; 1,333 CA likely voters) produces a similar 45-36% split. It appears Sen. Feinstein will be re-elected next week, but the numbers show she could have been primed for an upset against a stronger opponent.
Florida: Not surprisingly, new polls were released in the nip and tuck Florida Senate race. The University of North Florida (10/23-26; 1,051 FL likely voters; automated) and Suffolk University (10/24-28; 500 FL likely voters) both went into the field and found Sen. Bill Nelson (D) clinging to small leads over Gov. Rick Scott (R). UNF posts the ballot test at 47-46% in the Senator’s favor, while Suffolk finds an equivalent 45-43% point spread.
Two national pollsters (SSRS for CNN and the Trafalgar Group) and a local Florida organization (St. Pete Polls) all see a Nelson 49-47% edge. The margins again suggest that either man can still win this race as we enter the campaign’s last week. With early voting already more than half-way through, it is likely that as much as 50% of the statewide vote is already in the ballot box.
Indiana: We now are seeing a spate of Indiana Senate polls in a race that once had only a dearth of information. Early in the week it appeared that GOP challenger Mike Braun was establishing a clear lead over Sen. Joe Donnelly (D). A new Cygnal polling firm survey (10/26-27; 505 IN likely voters) finds Mr. Braun holding a 49-46% advantage, which is a similar result to several other current surveys. But a late-breaking Fox News survey (10/27-30; 722 IN likely voters) finds Sen. Donnelly reasserting himself into the lead. The Fox results give the Senator a 45-38% advantage.
Montana: The University of Montana conducted their Big Sky Poll, and Democrats are faring well in the tabulations. The survey was conducted from 10/10-18 and interviewed 607 Montana registered voters, of whom 533 were determined to be likely voters. According to the ballot test, Sen. Tester maintains a 49-39% advantage over state Auditor Matt Rosendale (R).
New Jersey: Emerson College is the latest to survey the Garden State Senate race (10/24-26; 659 NJ likely voters) and, like other recent polls, detects a close race between embattled Sen. Bob Menendez (D) and former pharmaceutical company CEO Bob Hugin (R). The Emerson results find Sen. Menendez’s lead at 47-42%, on the cusp of being outside the margin of error. The Senator must overcome a consistently poor favorability index of 34:53% according to the Emerson data, which is in line with other statewide polling.
New Mexico: New Mexico former Governor and Libertarian presidential nominee Gary Johnson has made a difference in the Senate race in that the well-defined three-way format makes the race closer. Yet, first term incumbent Martin Heinrich (D) is still well positioned to win re-election.
Pacific Market Research conducted a poll for KRQE News 13 in Albuquerque (10/19-24; 400 NM likely voters) and finds Sen. Heinrich leading New Mexico Labor Commission member Mick Rich (R) and Mr. Johnson, 40-28-22%. When undecideds are projected, both Heinrich and Rich gain, but Johnson remains unchanged. Sen. Heinrich’s re-election is not in doubt, but there is a good chance he will win with only a plurality vote.
Texas: Quinnipiac University just returned from the field in the Lone Star State (10/22-28; 1,078 TX likely voters) and finds Sen. Ted Cruz (R) maintaining a small lead over Rep. Beto O’Rourke (D-El Paso). The ballot test results project Sen. Cruz to be holding a 51-46% edge. This compares with the same respondents giving Gov. Greg Abbott (R) a much stronger 54-40% advantage over former Dallas County Sheriff Lupe Valdez (D).
Two days ago, Dixie Strategies released a survey in Utah that found GOP Rep. Mia Love (R-Saratoga Springs) trailing Salt Lake County Mayor Ben McAdams (D) by almost seven percentage points. The survey was met with bias complaints. Yesterday, the same polling firm publicized their new Texas results (10/25-26; 588 TX likely voters) that give GOP Sen. Ted Cruz (R) arguably his largest polling lead during the entire election cycle. The Dixie Texas survey finds Sen. Cruz holding a 52-42% advantage over Rep. Beto O’Rourke (D-El Paso).
CA-50: Survey USA polling for the San Diego Union Tribune (10/25-29; 547 CA-50 likely voters) finds Rep. Duncan Hunter (R-Alpine) leading Democrat Ammar Campa-Najjar, 48-45%, in a race marked with the incumbent’s campaign finance scandal. Rep. Hunter has mercilessly attacked his opponent over having a grandfather who was a Palestinian terrorist responsible in part for the murder of Israeli athletes at the 1972 Olympic Games.
MI-13: When Rep. John Conyers (D-Detroit) resigned his seat at the beginning of this year, Gov. Rick Snyder (R) scheduled the replacement election concurrently with the regular campaign timetable. In the August Democratic primary, the regular election and the special election produced two different winners largely because not every regular election candidate entered the special election field. The full-term Democratic primary winner is former state Rep. Rashida Tlaib, and she will be sworn into office as part of the new freshman class. Yet, Detroit City Council President Brenda Jones won the special election nomination. This means Ms. Jones would serve only in the coming lame duck session.
With no Republican on Tuesday’s ballot, Ms. Jones has now filed as a write-in candidate, launching a long shot effort to win the full term. Should she fail, which is a virtual certainty, Ms. Jones may decide not to serve in the lame duck session. She has asked the House Ethics Committee to rule on her inquiry that would allow her to serve the short term without resigning from the Detroit City Council. She is indicating that should the Committee reject her inquiry, she would likely decline to enter Congress in order to keep her local position.
MT-AL: Former state Rep. Kathleen Williams (D) is making a strong run at freshman Rep. Greg Gianforte (R-Bozeman), raising over $3.2 million for her race and pulling close to the new Congressman in the polling. The University of Montana’s Big Sky Poll (see Montana Senate above) actually finds Ms. Williams ticking ahead of Rep. Gianforte, 45.8% to 45.3%, but from the same sample that appears to contain a Democratic skew. It is likely, however, that this race is closing and now must be added to the highly competitive realm.
New Mexico: The Carroll Strategies firm conducted a survey for KOB News 4 in Albuquerque, testing the state’s two open congressional seats that the respective major party gubernatorial nominees are vacating. If the polling is correct, it appears that each party will keep the seat that it currently occupies.
In Rep. Michelle Lujan Grisham’s open 1st District, former state Democratic Party chair and Tribal Administrator Debra Haaland is well ahead of frequent Republican nominee, Janice Arnold-Jones. The KOB poll (10/29; 452 likely NM-2 likely voters; automated) posts Ms. Haaland to a 51-43% advantage in an Albuquerque anchored seat that has moved solidly into the Democratic column since Ms. Grisham first won here in 2012.
In Rep. Steve Pearce’s (R-Hobbs) 2nd District, the KOB poll (10/29; 338 NM-2 likely voters; automated) projects GOP state Rep. Yvette Harrell (R-Alamogordo) to be leading attorney Xochitl Torres-Small (D) by a 47-42% spread. This is a must-win Republican seat, so Ms. Harrell assuming a late lead is welcome news for the candidate and party leaders.
NY-27: Turning to New York, Rep. Chris Collins (R-Clarence/Batavia), under federal indictment for insider trading, holds a close 44-40% edge over Democrat Nate McMurray according to a new Siena College/New York Times survey (10/24-29; 608 NY-27 likely voters).
NC-2: In another among the far-reaching number of competitive Republican seats, Rep. George Holding (R-Raleigh) looks to be in much better position as the election draws near even though Democrats appear to be in a more favorable position during the statewide early voting cycle. According to a new Survey USA poll (10/24-28; 565 NC-2 likely voters), Rep. Holding has re-opened a 49-40% lead over former state Rep. Linda Coleman (D-Raleigh).
PA-16: A Susquehanna Polling & Research survey finds four-term Rep. Mike Kelly (R-Butler) dropping behind his challenger, attorney and former congressional nominee Ron DiNicola, in the newly constructed western Pennsylvania district that stretches from Lake Erie through Butler County. The Susquehanna data (10/29-30; 405 PA-16 likely voters) actually finds Rep. Kelly trailing Mr. DiNicola, 51-47%.
Upon a deeper review of the polling questionnaire and responses, however, we see push questions about President Trump being asked before the ballot test. Such a process usually tends to skew subsequent answers. Therefore, these results are probably not a wholly accurate picture of how the candidates stand, but there is little doubt that this is a competitive contest.
UT-4: In a survey result that Rep. Mia Love’s (R-Saratoga Springs) campaign pollster heavily disputes, Dixie Strategies, polling for KUTV News 2 in Salt Lake City (10/25; 936 UT-4 likely voters; automated), finds Salt Lake County Mayor Ben McAdams (D) polling beyond the Congresswoman by just over six-points, thus exceeding the polling margin of error. The ballot test finds a 50.5-43% spread in the Democratic candidate’s favor. All other surveys have found a tight race, most of them with Rep. Love leading within the margin of error.
Alaska: A new Alaska Survey Research poll (10/26-29; 500 AK likely voters) finds former US Senator Mark Begich (D) pulling into a virtual tie with ex-state Senator Mike Dunleavy (R) in the now open Governor’s campaign. The poll finds Dunleavy holding the smallest of edges, 45.5 – 45.3%, over Mr. Begich. The race has obviously tightened substantially since Gov. Bill Walker (I) exited the race and threw his support behind Begich.
Florida: The previously covered North Florida University survey that sees only a one-point difference in the Senate race (see Florida Senate above) finds Tallahassee Mayor Andrew Gillum (D) jumping out to a 49-43% advantage over resigned Rep. Ron DeSantis (R), his largest lead of the general election campaign. Most other polling finds Mr. Gillum to be ahead, but well within the polling margin of error, usually only a point or two.
New Mexico: The aforementioned Pacific Market Research media poll (see New Mexico Senate above) also tested the open Governor’s race. The results from this race appear consistent with other data we’ve seen here. PMR sees Rep. Michelle Lujan Grisham (D-Albuquerque) leading Rep. Steve Pearce (R-Hobbs), 48-39%. The sample size of 400 likely voters is low, meaning the error factor is higher. While certain data has shown a closer race, most of the polling gives Ms. Grisham a lead within this poll’s range. Gov. Susana Martinez (R) is ineligible to seek a third term.
Texas: From the aforementioned Dixie Strategies survey (see Texas Senate above), Gov. Greg Abbott (R) is posted to a strong 26-point lead over Dallas County Sheriff Lupe Valdez (D), 59-33%. Though this poll provides Gov. Abbott a much stronger lead than Quinnipiac University’s 54-40% result, which was released only a day earlier, the Dixie numbers are actually more consistent with other recent published data. Regardless of the projected margin, Gov. Abbott is well on his way to securing a second term.