Overnight Regulation: Senate Dems unveil gun control plan | McConnell shelving gun bills | Senators push Fed chief on easing bank rules | IRS looks to close hedge-fund carried interest loophole

by Lydia Wheeler - 03/01/18 6:12 PM ET

Welcome to Overnight Regulations, your daily rundown of news from the federal agencies, Capitol Hill and the courts. It’s Thursday evening here in Washington where Trump called for “very strong” penalties for drug dealers.

Peter Sullivan has the latest on that here.

THE BIG STORY

Senate Minority Leader Charles Schumer (D-N.Y.) unveiled his caucus’ three-part plan for gun control in the wake of the deadly school shooting that killed 17 people in Florida last week.

Here’s what Democrats want:

An assault weapons ban to be debated on the Senate floor.
Background checks for guns sold over the internet and at gun shows.
Protective orders that allow law enforcement or family members to get a court order to block an individual deemed dangerous from getting a gun.

In announcing the plan Senate Minority Leader Charles Schumer (D-N.Y.) urged President Trump to support the assault weapons ban, the most controversial of the three proposals.

“Today I am strongly urging the president to follow through on his comments yesterday by endorsing these proposals and pushing Republican leaders in Congress to once and for all buck the NRA,” he said.

“If the president can get some Republicans to vote for the assault weapons ban … we can pass it soon,” he said.

Jordain Carney has that story here.

But the Senate won’t be voting on any gun control measures next week.

Senate Majority Leader Mitch McConnell is instead focusing next week’s floor action on banking reform and legislation to address sex trafficking.

McConnell is blaming Democrats for holding up a proposal, sponsored by Senate Republican Whip John Cornyn (R-Texas) and Democratic Sen. Chris Murphy (Conn.), to strengthen background checks for firearms purchases.

“We tried to get it cleared yesterday, but the Democratic leader objected,” McConnell said.

Democrats, however, say conservatives led by Sen. Mike Lee (R-Utah) are objecting to moving the Cornyn-Murphy bill not them.

Alex Bolton and Sylvan Lane have that story here.

REG ROUNDUP

Finance: Senators backing a bill to exempt dozens of banks from strict federal oversight pushed the chairman of the Federal Reserve Thursday to bolster their case.

Members of the Senate Banking Committee sought confirmation from Fed chairman Jerome Powell that a bipartisan bill to roll back parts of the Dodd-Frank Act would benefit the economy.

Powell, a Republican who has previously supported several provisions of the bill, signaled support for much of the measure without explicitly endorsing it.

“I think it gives us the tools that we need to continue to protect financial stability,” Powell said of the bill. “We have broad safety and soundness authority.”

Republicans and moderate Democrats backing the bill sought to dispel a wave of liberal criticism that the measure goes too far to deregulate major banks.

Sylvan Lane again with the story here.

Taxes: The Treasury Department and IRS on Thursday issued a notice aimed at preventing investment-fund managers from avoiding new limits on the carried interest tax break.

Carried interest is the profits interest that investment-fund managers receive, and it is generally taxed at capital gains rates rather than the higher ordinary income rates.

Under a provision in the new tax law, investment-fund managers have to hold investments for at least three years in order to qualify for the carried-interest tax break, up from one year under the old tax code.

But investments held by corporations are exempt from being subject to the three-year holding requirement. That reportedly led some hedge fund managers to set up S corporations — which are pass-through businesses rather than traditional C corporations — in order to avoid the requirement.

Treasury and the IRS said in their notice that they plan to issue regulations that prevent investments held by S corporations from being exempt from the three-year requirement.

Naomi Jagoda has the story here.

Environment: The Nuclear Regulatory Commission (NRC) said it is considering a private company’s application to build a nuclear waste site.

Holtec International wants a 40-year license to store up to 8,680 metric tons of nuclear waste at a facility in southeastern New Mexico. It would be an interim storage site, so the nuclear fuel would have to be moved out at some point.

If built, the site would be the first nuclear waste storage facility in the United States other than the nuclear plants and other locations themselves.

Timothy Cama has the story here.

States: State legislatures across the country are considering new restrictions or expansions of gun rights in the aftermath of the mass shooting at a Parkland, Fla., high school in February, setting a frenetic pace in a debate that appears stymied in status quo in Washington.

Even in states overwhelmingly controlled by one party or the other, debates over gun control or gun rights routinely rank among the most contentious and ponderous of the legislative session.

But in the weeks after the shooting that left 17 students and faculty members dead, states from Alaska to Florida have virtually raced to complete work on measures that address gun violence — many in vastly different ways, ranging from “red flag” laws to legislation to arm educators.

Reid Wilson has the story here.

Courts: Two liberal advocacy groups are suing the Department of Housing and Urban Development (HUD) and the Justice Department for documents they say show agency officials are quietly making policy decisions that harm LGBT people.

People for the American Way and Right Wing Watch (RWW) say in the 10-page lawsuit, filed with the U.S. District Court for the District of Columbia, that the agencies have failed to respond to their Freedom of Information Act (FOIA) requests within the law’s applicable time-frame.

RWW asked HUD to produce documents following a New York magazine report that the agency quietly removed materials from its website that helped train homeless shelters to provide equal access to transgender people, canceled a survey of pilot programs designed to decrease LGBT homelessness in Cincinnati and Houston, and directed a department division to dissociate itself with a study it funded on LGBT housing discrimination.

RWW asked the Justice Department for documents related to reports that it removed multiple references to “lesbian, gay, bisexual, transgender, and questioning youth” from its 2017 annual solicitation for the Mentoring for Child Victims of Commercial Sexual Exploitation and Domestic Sex Trafficking Initiative.

Read the story here.

Tech: IBM is calling for lawmakers to crack down on internet platforms, arguing that companies like Google and Facebook face little regulation and enjoy broad legal immunity over what happens on their services.

Christopher Padilla, IBM’s vice president for government affairs, argued in a blog post on Thursday that internet companies need to be held in check by the government in the same way firms in other industries are.

“Over the last year, it has become increasingly clear that something is out of balance in that equation,” Padilla wrote. “Governments, advertisers, and even ordinary users are demanding that companies take more responsibility for the societal effects their services can have on children, on civic dialogue, on elections, or in facilitating criminal or terrorist activity.”

Harper Neidig has the story here.

Finance: The acting director of the Consumer Financial Protection Bureau (CFPB) said Thursday he thinks he could remain in charge of the agency for as long as another six months while waiting for President Trump to nominate and the Senate to confirm a new director.

Mick Mulvaney, the Office of Management and Budget director, said he has “no idea” how much longer he’ll be the CFPB acting chief. He was appointed to lead the agency in November under the Federal Vacancies Act as a temporary replacement.

Mulvaney said at a U.S. Chamber of Commerce event, “The statute allows me to stay until the end of June, but if the president nominates someone before then, the statute allows me to stay until they’re confirmed.”

Trump has not nominated a new director for the CFPB, an agency Republicans have indicated they would prefer to eliminate.