| Happy Wednesday and welcome back to Overnight Finance, where we hope you've finished your taxes by this point. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line. See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://bit.ly/1NxxW2N. THE BIG DEAL: The Senate on Tuesday repealed a controversial Consumer Financial Protection Bureau decree on auto-loan financing in a vote that could set a precedent for Republicans to repeal a broad range of regulations. Senators generally fell along party lines in the 51-47 vote to repeal 2013 guidance from the Consumer Bureau on "dealer markups" -- the interest a dealer adds to a customer's third-party loan as extra compensation. Assuming the House passes the measure, the CFPB auto-lending guidance will likely be the first informal regulation to be repealed by Congress through the Congressional Review Act (CRA). I explain here what today's vote means for the CFPB guidance and the future of federal regulations. Why it matters: While Congress has used the Congressional Review Act more than a dozen times since 2017 to repeal formal rules issued under former President Obama, it has never before used the law to repeal guidance.
Republicans are now looking to do so, and could go after a range of regulatory actions that had been considered off-limits. Efforts to repeal rules under the Congressional Review Act cannot be filibustered, giving Republicans a powerful tool to slash regulations with only a majority vote in each chamber. The act also bans agencies from issuing rules similar to those overturned under the law.
It did not initially appear that the Congressional Review Act could be used to cover informal policies like the CFPB auto-lending guidance. That changed in December, when the Government Accountability Office ruled that unofficial regulations were covered under the law. Sen. Pat Toomey (R-Pa.), who requested the analysis, and Sen. Jerry Moran (R-Kan.) introduced the resolution repealing the guidance. Reactions - "The goal here is simple: We want to protect consumers and job creators from needless interference by the federal bureaucracy." -- Senate Majority Leader Mitch McConnell (R-Ky.).
- "We should be doing everything we can to protect against this kind of discrimination." -- Sen. Cory Booker (D-N.J.) said in defense of the guidance.
- "A horrible precedent to use this really crude, fast track procedure to undo guidances." -- Lauren Saunders, associate director of the National Consumer Law Center.
- "The legislation is a measured response to the CFPB's attempt to regulate the $1.1 trillion auto financing market." -- the National Automobile Dealers Association.
- "If Republicans are willing to use this loophole to attack our basic right to equality, there may be no end to the other consumer protections they could repeal." -- Sen. Sherrod Brown (D-Ohio).
- "The CFPB's 2013 Auto Bulletin was a backdoor attempt at rulemaking without notice or comment and lacked the clarity needed by lenders." -- Consumer Bankers Association President and CEO Richard Hunt.
ON TAP TOMORROW - Senate Banking Committee: Hearing on the semi-annual testimony on the Federal Reserve's supervision of the financial system, with Fed Vice Chairman of Supervision Randal Quarles, 9:30 a.m.
- Global Finance Forum sponsored by American Investment Council (AIC), Futures Industry Association (FIA), Investment Company Institute (ICI), Managed Funds Association (MFA), Securities Industry and Financial Markets Association (SIFMA), and the U.S. Chamber of Commerce Center for Capital Market Competitiveness, 7 a.m.
LEADING THE DAY House passes series of bills to improve the IRS: The House on Wednesday easily passed bipartisan legislation designed to modernize the IRS by improving the agency's customer service and information technology. The votes came on the same day as the IRS's new deadline for taxpayers to file their 2017 returns. The agency gave taxpayers a one-day extension to file after it experienced technical issues on Tuesday. One of the IRS bills, which passed unanimously, focuses on customer service and enforcement. A second bill, which passed by a vote of 414-3, focuses on updating the IRS's cybersecurity and information technology. And a third IRS-related bill would direct the Justice Department to establish expedited review procedures in identity-theft cases involving impersonators of IRS agents. The Hill's Naomi Jagoda breaks them down for us here. GOP afraid of tax cut sequel: New projections on the size of the federal deficit and the price tag of President Trump's tax-cut law have left some Republican senators nervous about voting on another tax package before the election. While the GOP on Tuesday used Tax Day to proclaim the success of last year's $1.5-trillion tax cut, there is some unease about doubling down on the issue in the coming months. Some in the party want to go on offense and try to make permanent the individual tax cuts that were part of last year's legislation. Others aren't sold. "I'd say, 'Hell no. Hell no -- double hell no,' " retiring Sen. Bob Corker (R-Tenn.), a leading budget hawk, told The Hill when asked about making the individual tax breaks permanent. Corker supported the bill, but last week -- citing the deficit -- said it could "be one of the worst votes I've made." Sen. David Perdue (R-Ga.), who has also raised alarm about the growing debt, said he has "concerns" about making the individual tax breaks permanent. He added his first reaction is to support a long-term tax cut for individuals but cautioned it needs to be examined more closely. And Sen. Jeff Flake (R-Ariz.), who wavered before backing the 2017 tax package, said he's undecided about voting for another round of cuts. The snag? Extending the individual tax cuts would add between $573 billion and $736 billion to the national debt, according to a Penn Wharton Budget Model analysis released last week. A Senate Republican aide said a bill to make the tax cuts permanent may not come to the floor because it divides the Senate GOP conference and doesn't have a chance of passing, as it would need 60 votes to overcome an expected Democratic filibuster. "Our membership is torn on it," the aide said. "And it's not a 50-vote exercise because we're not going to pass a budget." The Hill's Alexander Bolton tells us why the Senate GOP isn't ready to extend the individual cuts. SEC votes to propose stricter broker rules: From The Wall Street Journal: "Stockbrokers would face tighter restraints on conflicts that can bias investment advice to customers, under a rule proposed Wednesday by the Securities and Exchange Commission. "The SEC's plan to require brokers act in the best interest of clients is less restrictive than the Labor Department's "fiduciary rule" affecting retirement accounts that was completed during the last days of the Obama administration, and will likely spark complaints from congressional Democrats and consumer groups that it is too permissive. "The SEC's rule wouldn't ban any single conflict of interest, such as sales contests that brokers conduct to juice sales of particular products, but would generally require brokers to disclose conflicts of interest and try to blunt their impact." McCarthy defends spending rollbacks: House Majority Leader Kevin McCarthy (R-Calif.) said Tuesday he stands by his call to claw back some of the spending in the $1.3 trillion omnibus bill approved by Congress last month despite Senate Majority Leader Mitch McConnell's (R-Ky.) dismissal of the idea. McConnell said it would be ill-advised for Republicans to walk back on the deal they made with Democrats, telling Fox News, "You can't make an agreement one month and say: 'OK, we really didn't mean it.' " But McCarthy -- who's been discussing using the 1974 Congressional Budget and Impoundment Control Act to rescind funds from the massive spending package with President Donald Trump -- said he doesn't see rescissions reneging on the deficit-busting agreement, arguing that it's "premature" to discount the proposal before they've seen what's in it. "Rescissions are not about the [omnibus] -- it's about saving money. You could have some unencumbered funds that are still out there from past times," he told The Hill's Juliegrace Brufke. She explains the showdown here. MARKET CHECK: Stocks had an uneven and underwhelming day on whole. The Dow Jones Industrial Average sunk 38 points (0.16 percent) while the Nasdaq and S&P 500 eked out gains of 0.19 and 0.08 percent each. GOOD TO KNOW - After a brief flirtation with rejoining the trade pact, President Trump said he's opposed to the U.S. re-entering the Trans-Pacific Partnership (TPP), and instead advocated for establishing bilateral trade deals with countries.
- The CEO of Time Warner argued in court that his company's merger with AT&T is essential to compete with internet giants and dismissed the Justice Department's case against the deal as "ridiculous."
- The biggest U.S. banks made $2.5 billion from the new tax law in just one quarter, according to The Wall Street Journal.
- Camden Fine, the outgoing CEO of the Independent Community Bankers of America, reflects on 15 years in Washington.
- Patrick Deitz has been appointed senior federal policy advisor and head of federal affairs for Jackson National Life Insurance Company. Deitz has spent more than 10 years in federal legislative activity, serving in a number of senior legislative positions for several congressional offices and the House Financial Services Committee.
ODDS AND ENDS - Starbucks CEO Howard Schultz said in a new interview that he is "embarrassed" and "ashamed" after two African-American men were arrested by police while waiting for a friend at a Philadelphia-area location.
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