The Golden Apple – December 10, 2021

House Financial Services Committee gets a lesson on stablecoins
Although subcommittees and task forces had held hearings on a wide range of topics related to cryptocurrency and digital assets, it wasn’t until this week that the full House Financial Services Committee held a hearing on the topic. Six industry executives appeared before the committee to explain the use of digital assets as a store of value, an investment vehicle, and particularly as a medium of exchange that could replace traditional methods of transferring funds in the U.S. and around the world. Members on both sides of the aisle were especially interested in the potential use of stablecoins for cross-border payments and to make the payments system accessible to the unbanked and underbanked. Witnesses called for a single federal regulator to oversee digital assets, and emphasized the need to update and clarify federal law in this area. The Senate Banking Committee will have its own hearing on stablecoins next week. 

Senate hearing on market concentration and data brokers highlights need for federal privacy standards
The Senate Finance Subcommittee had an unusual multi-themed hearing Tuesday on “Promoting Competition, Growth, and Privacy Protection in the Technology Sector.” Subcommittee Chair Elizabeth Warren (D-MA) wanted to explore the dangers of market consolidation in the tech sector to consumers, workers, and small businesses, while ranking member Senator Bill Cassidy (R-LA) wanted to highlight abuses within the essentially unregulated data brokerage industry. Cassidy called for federal limits on the collection, sale, and use of personal information. Warren agreed on the need to prevent tech firms from exploiting personal information and using data in ways that threaten national security and discriminate against vulnerable populations, but also called for stronger antitrust laws and robust enforcement in the technology sector.

House approves LIBOR fix while CFPB finalizes transition rule
On Wednesday, the House voted 415-9 in favor of HR 4616, the Adjustable Interest Rate (LIBOR) Act of 2021. HR 4616 would allow the Federal Reserve Board to select a replacement rate for contracts that reference LIBOR if the contract has not identified a fallback rate by the time LIBOR is retired in 2023. The bill does not yet have a Senate companion. Meanwhile, the Consumer Financial Protection Bureau (CFPB) published its final rule on the transition from LIBOR, which sets requirements for the selection of replacement rates after April 1, 2022. No new contracts may reference LIBOR after December 31, 2021. 

FDIC distances itself from CFPB request for comments on bank mergers
Yesterday, Rohit Chopra, Director of the Consumer Financial Protection Bureau, posted a request for information to the Bureau’s website, asking for comments to support a review of the regulatory framework for bank mergers. Chopra said that this request would soon appear in the Federal Register as part of the Federal Deposit Insurance Corporation’s review of Bank Merger Act policies. He specifically asked for feedback on how regulators should review a merger’s impact on families and local businesses, and how regulators can make sure that mergers don’t increase the chances of a bank becoming too big to fail or systemically important. Later in the day, the FDIC posted its own statement saying that its Board had not agreed to a review of the Bank Merger Act, and had no plans to publish a request for information in the Federal Register. Today, Senator Sherrod Brown (D-OH), Chairman of the Senate Banking Committee, said that the FDIC Board should move forward with this review. 
Confirmations, Nominations, Departures
Rep. Devin Nunes (R-CA), ranking member of the Permanent Select Committee on Intelligence and the Ways and Means Subcommittee on Health, is leaving Congress at the end of this month to become CEO of Trump Media & Technology Group.

The White House withdrew the nomination of Dr. Saule T. Omarova to be Comptroller of the Currency, at the nominee’s request.

Commodity Futures Trading Commissioner Dawn Stump, whose term ends in April 2022, announced that she would not seek another term.
The Week Ahead
The House and Senate were supposed to start their year-end recess today, but they’ll return on Tuesday to finalize an increase in the federal government’s borrowing authority. The Senate also needs to vote on the National Defense Authorization Act, which the House passed this week by a vote of 363-70.  

December 14 at 10 a.m.  Senate Committee on Banking, Housing, and Urban Affairs holds a hearing on “Stablecoins: How Do They Work, How Are They Used, and What Are Their Risks?” 

December 15 at 10 a.m.  Senate Banking Committee holds a hearing on “Disaster Recovery Assistance – Authorization of the Community Development Block Grant Program – Disaster Recovery Program.” 

December 15 at 2:30 p.m.  Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights holds a hearing to examine the impact of consolidation and monopoly power on American innovation
The Ellis Insight – Jim Ellis on political news
Missouri:  The Remington Research Group again tested the Show Me State’s Republican U.S. Senate field for the Missouri Scout political blog. The survey (12/1-2; 744 MO likely Republican primary voters; interactive voice response system) continues to show scandal-tainted former Governor Eric Greitens leading the field, but again with only a small margin. 

The ballot test finds Mr. Greitens holding a 27-24-16-7-3% edge over Attorney General Eric Schmitt, U.S. Reps. Vicky Hartzler (R-Harrisonville/Columbia) and Billy Long (R-Springfield), and state Senate President Dave Schatz (R-Sullivan). The difference from the last released public poll is the inclusion of Mr. Schatz who recently joined the race.
Nevada:  A late November Trafalgar Group survey (11/24-29; 1,034 NV likely voters; live interview; text; online) projects former state Attorney General Adam Laxalt (R) pulling ahead of first-term Senator Catherine Cortez Masto (D) by a 44-41% margin. The Nevada race is expected to be highly competitive. It is one of only four 2022 GOP conversion targets.

CA-22: Ten-term U.S. Representative Devin Nunes (R-CA) will leave Congress at the end of this year. Mr. Nunes is departing to become CEO of the Trump Media & Technology Group that former President Donald Trump is launching. A Nunes vacancy means 37 districts will now be open in the 2022 election, counting pure open seats, those coming from reapportionment, and the new seats created from redistricting. It is possible the Nunes seat will be unfilled for the balance of the term, which would be consistent with Governor Gavin Newsom’s (D) action when a similar Republican district was left vacant at the beginning of 2020.
Maryland Redistricting: Moving at lightning speed in the special legislative redistricting session, the Democratic leadership returned the congressional map that Governor Larry Hogan (R) vetoed to the Senate and House floors for override votes just hours after the chief executive took his action. Obtaining the veto override in both houses, the new eight-district map then became law. Governor Hogan is now threatening to lead a lawsuit against the plan. The new map protects all seven Democratic seats while making the one Republican district of Rep. Andy Harris (R-Cockeysville) more competitive.
NY-11: Former New York Congressman Max Rose (D), who lost his seat after one term to current Rep. Nicole Malliotakis (R-Staten Island), announced that he will return for a re-match. The 11th District, covering all of Staten Island and part of Brooklyn, is expected to become more Democratic, thus enhancing Mr. Rose’s chances.

North Carolina Redistricting:  Early in the week, a North Carolina three-judge appellate panel issued a stay order on the Tar Heel State’s December 17 candidate filing deadline pertaining to a redistricting lawsuit before the court. A day later, the full 15-member state Appellate Court overturned the panel’s ruling, only to see the state Supreme Court quickly reinstate the candidate filing deadline stay and ordered the March 8 primary postponed until May 17. Once again, the legal drama surrounding North Carolina redistricting continues. In the previous decade, the congressional boundaries were redrawn three separate times.
NH-1: New Hampshire Rep. Chris Pappas (D-Manchester), who was thought to be a potential gubernatorial candidate if Governor Chris Sununu (R) had decided to run for the Senate, announced that he will seek re-election to the House. The state’s 1st District has been the most politically volatile congressional district in the country, re-electing its incumbent only twice since the 2004 election. Mr. Pappas secured a second term in 2020 with a 51-46% victory over businessman Matt Mowers (R). Redistricting, however, is likely to make this district much more Republican, thus making Rep. Pappas’ victory path rockier.
New Mexico Redistricting: Democratic state legislative leaders introduced their congressional redistricting map, and as prognosticators predicted, they are attempting to flip the Republican 2nd District of freshman Rep. Yvette Harrell (R-Alamogordo). To do so, however, their other two strong Democratic seats become more competitive. Under this map, all three districts have a Democratic political swing of just 51-56%. Should this map pass, at least two of these new districts will be in the competitive category.
Texas Redistricting: The U.S. Justice Department filed a federal lawsuit against the new Texas congressional map claiming the legislature and Governor’s draw discriminated against minority voters. The candidate filing deadline is December 13 for the March 1 primary, so it is probable that the eventual three-judge panel won’t take any action before the former date but could order a stay before the March 1 primary. 

If the new congressional boundary plan is stayed before the general election, we could see a return to the current 36-seat map for the 2022 election with the candidates for the two new seats being forced to run statewide. Texas earned two additional seats for the ensuing decade in the national reapportionment.
VT-AL: Democratic Lt. Governor Molly Gray announced that she will enter Vermont’s open at-large congressional race next year. The seat is open because veteran incumbent Rep. Peter Welch (D-Norwich) is running to succeed retiring Senator Patrick Leahy (D). The House race is expected to draw a large number of candidates, particularly on the Democratic side. After the August 9 state primary, the Democratic nominee will be favored in November.
Virginia Redistricting: Because the Virginia Redistricting Commission members failed to produce a new congressional map by the stated deadline, the state Supreme Court was forced to assume map drawing responsibilities. The court hired two special masters, a Democrat and a Republican, to collaborate and produce a new map. While the new map’s 7D-4R ratio appears to remain intact, two of the Democratic seats look to be more competitive, those of Reps. Elaine Luria (D-Norfolk) and Jennifer Wexton (D-Leesburg). A third Democrat, two-term Rep. Abigail Spanberger (D-Glen Allen), is left with no place to run though her 7th District reappears in northern Virginia as a safe seat for her party.

Alabama: This week, real estate developer Tim James, son of former Alabama Governor Fob James (R), announced that he will join the field of candidates opposing Governor Kay Ivey in next year’s Republican primary. Former Ambassador to Slovenia Lynda Blanchard, currently a Republican U.S. Senate candidate, as expected switched to the Governor’s race this week. Already in the Republican gubernatorial primary are state auditor Jim Zeigler, former Morgan County Commissioner Stacy George, and pastor Dean Odle. 

Candidate filing for the May 24 state primary is March 3. If no candidate receives majority support in the primary, a runoff election between the top two finishers will be held on June 21. It remains to be seen if all of these contenders actually file their papers to become official candidates.
Georgia:  Former Georgia U.S. Senator David Perdue, who was defeated in the 2020 post-election runoff, announced that he will challenge Governor Brian Kemp in the 2022 Republican primary. He comes to the race with the backing of former President Donald Trump who expects to be very active in the primary campaign. Governor Kemp has Republican base problems largely because of his post-election voter fraud investigations and decisions. In his announcement address, Mr. Perdue said, “instead of protecting our elections, [Kemp] caved to Abrams, and cost us two Senate seats, the Senate majority, and gave Joe Biden free rein.” Expect this to be a hotly contested statewide primary campaign.
Candidate filing is scheduled for March 11 with the state primary tabbed for May 24. Also in the GOP race is former DeKalb County Executive and ex-state Representative Vernon Jones. In the unlikely event that no candidate receives majority support in the first election, a runoff would occur on July 26. The eventual Republican nominee will face Democratic 2018 gubernatorial nominee Stacey Abrams who lost to Governor Kemp by just over one percentage point.
The Insider Advantage polling organization immediately tested the Georgia Republican electorate (12/6; 500 GA likely Republican primary voters) and found Governor Kemp leading ex-Mr. Perdue, 41-22%, on the initial ballot test question. When the respondents are informed that Mr. Trump has endorsed the former US Senator, the ballot test reverts to a 34-34% tie, or a net swing of 19 percentage points in Mr. Perdue’s favor.
Massachusetts:  U.S. Labor Secretary and former Boston Mayor Marty Walsh (D) answered reporters’ questions about the now open Governor’s race at the end of last week. He has not ruled out becoming a Democratic gubernatorial candidate, and would bring to the campaign an obvious strong political base from the state’s largest city of Boston. Two days prior, Governor Charlie Baker (R) said he will not seek a third term in office. This clearly changes the Massachusetts political picture, as most political observers expected him to be a candidate.

Currently, in the Democratic primary are state Sen. Sonia Chang-Diaz (D-Boston), former state Sen. Ben Downing, and Harvard University professor Danielle Allen. At this point, the leading Republican is former state Representative and 2018 U.S. Senate nominee Geoff Diehl.
Nevada:  The Trafalgar Group released a survey of the Nevada electorate (11/24-29; 1,034 NV likely general election voters; live interview, text & interactive voice response system) that finds former U.S. Senator Dean Heller (R) jumping out to a 47-40% advantage over incumbent Governor Steve Sisolak (D) who is seeking a second term. Nevada continues to feature close elections, and it appears the 2020 vote will follow that same pattern.
New York:  New Governor Kathy Hochul leads the Democratic primary field in a just released statewide poll, but her margin is not impressive. According to the Siena College survey conducted during the 11/29-12/3 period (399 NY registered Democratic voters; live interview), Ms. Hochul, who ascended to the Governorship when elected incumbent Andrew Cuomo (D) resigned, holds a 36-18-10-6-6% margin over Attorney General Tish James, New York City Public Advocate Jumaane Williams, U.S. Rep. Tom Suozzi (D-Glen Cove), and New York City Mayor Bill de Blasio, respectively.
Ms. James, however, abruptly suspended her gubernatorial campaign and says she will now seek re-election as Attorney General. Mr. de Blasio filed a gubernatorial committee but has not formally announced his candidacy. The survey sample is low meaning the error rate is high. Governor Hochul obviously holds a substantial lead, but her mid-30s showing suggests that she is far from a lock for the party nomination. The New York primary is June 28.
Pennsylvania:  Former Pittsburgh area Congresswoman and ex-state Senator Melissa Hart (R) announced that she will enter the crowded open gubernatorial Republican primary next year, becoming the 14th entry. Ms. Hart served three terms in the House, losing her seat in 2006. She was defeated in a re-match attempt for her congressional seat, and then lost a Republican primary in 2012 in an attempt to return to the state Senate.
Texas:  Quinnipiac University released a new poll that countered the recent University of Texas at Tyler study (11/9-16; 1,106 TX registered voters; live interview and online), which found Governor Greg Abbott (R) leading ex-US Rep. Beto O’Rourke (D) by a 45-39% count. The Q-Poll (12/2-6; 1,224 TX adults; live interview) sees Governor Abbott rebounding to a 53:41% job approval index, a big change from their September finding of a 44:47% upside down rating. In the Quinnipiac ballot test, the Governor again posts his characteristically high standing leading Mr. O’Rourke, 52-37%.