On The Money: Trump waves off political risk from shutdown | Senate GOP, Dems get deal on major spending bill | Regulator to offer banking charters to financial tech firms | What to know from day one of Manafort trial

Happy Tuesday and welcome back to On The Money, slightly cheaper than a jacket a made out of ostrich. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL: President Trump said Tuesday that he doesn’t care about the political ramifications of shutting down the government over funding for his border wall as GOP leaders try to downplay his threats.

“I don’t care what the political ramifications are, our immigration laws and border security have been a complete and total disaster for decades, and there is no way that the Democrats will allow it to be fixed without a Government Shutdown,” Trump tweeted.

{mosads}

“A Government Shutdown is a very small price to pay for a safe and Prosperous America!” he added.

Trump since Friday has repeatedly threatened to veto government funding legislation unless lawmakers increase funding for his long-sought wall along the southern border. The House fiscal 2019 funding bill for the Department of Homeland Security includes $5 billion for the wall, which Trump insists isn’t nearly enough.

Lawmakers will have 19 days to pass government funding legislation when the House returns from recess in September. Republican leaders are eager to avoid a shutdown less than two months before the midterm elections, which they’d prefer to be a referendum on the economy.

Over in the upper chamber, Senate Majority Leader Mitch McConnell (R-Ky.) said Tuesday that he has reached a deal with Democrats to move a major spending package next month that would fund the Pentagon, the Department of Health and Human Services (HHS) and the Department of Labor, reports The Hill’s Alexander Bolton. McConnell and Senate Democratic Leader Charles Schumer (N.Y.) have agreed to keep poison-pill policy riders out of Senate appropriations bills so they can move on time and not get delayed by partisan fights.

But Trump has marched with House conservatives who want Congress to follow through on border wall funding and fulfill a promise to the president’s base.

GOP aides told The Hill’s Scott Wong and Juliegrace Brufke that they did not know whether Trump confidants Reps. Mark Meadows (R-N.C.) and Jim Jordan (R-Ohio), the two leaders of the conservative Freedom Caucus, were privately encouraging Trump to threaten a shutdown.

But Trump’s message is consistent with their pledge to stop GOP leaders from punting a fight over funding the border wall and other Trump priorities until after Election Day.

 

LEADING THE DAY

Regulator moves ahead with bank charters for fintechs: The Office of the Comptroller of the Currency (OCC) announced Tuesday that it would now consider bank charter applications from financial technology companies seeking approval to operate nationwide.

Comptroller of the Currency Joseph Otting said his agency will accept applications from online-only lenders, mortgage and loan servicers, and payment platforms to receive special-purpose federal bank charters. The OCC said companies that take and hold deposits from customers would not be eligible for the charter.

A federal charter would allow approved financial technology companies, known as fintechs, to operate throughout the country without seeking permission from each state. A fintech chartered as a national bank would avoid a costly state-by-state approval process, but would be subjected to federal banking regulations and inspections from the OCC.

Otting said the OCC’s decision is intended to “provide more choices to consumers and businesses, and creates greater opportunity for companies that want to provide banking services in America.” I’ve got more on the announcement here.

 

How it will work:

• The OCC said charter recipients would be held to capital, liquidity and financial inclusion standards akin to those imposed on banks.
• Chartered fintechs would also be required to submit plans for how they’d handle severe financial stress or be dismantled upon failure.
• Newly chartered fintechs would face stricter initial oversight from the OCC, similar to the heightened federal scrutiny new banks receive.

 

What comes next: Lots of legal challenges, probably. The Conference of State Bank Supervisors (CSBS) and New York Department of Financial Services sued the OCC over its plan to explore charters for fintechs. Their case was dismissed in December 2017 because the OCC had not yet decided to offer the charters.

Both regulatory agencies panned Otting’s decision to offer fintech charters and said it would pose immense risks to the U.S. financial system.

“Let us not forget that the last time the OCC pre-empted state consumer protection laws in a sweeping manner — in the early 2000s — predatory lenders were let off the hook and contributed to the largest number of home foreclosures since the Great Depression,” said CSBS president and CEO John Ryan.

The OCC’s decision comes almost two years after the agency announced it would explore offering charters to fintechs, and hours after the Treasury Department recommended it do so in a Tuesday report. 

The Treasury suggested dozens of ways that regulators and Congress could bolster the growth of financial technology platforms, while strengthening privacy safeguards amid cyber breaches.

The report encouraged the OCC to move forward with a special purpose charter that would give fintechs a license to operate nationally under the same standards as banks. Treasury said the charter could “provide a federal approach to reducing regulatory fragmentation and supporting beneficial business models.”

You can read more about the Treasury report’s recommendations here.

Companies could have paid workers more if they diverted stock buybacks: Publicly traded companies in the restaurant, retail and food manufacturing industries could have paid their workers thousands of dollars more if they had used the money they spent on stock buybacks on wages instead, according to a report released Tuesday.

“Stock buybacks greatly benefit corporate executives (who hold stock-based compensation) and market speculators, but they leave companies with fewer resources available to invest in workers and future growth,” the left-leaning Roosevelt Institute and National Employment Law Project (NELP) wrote in a joint report.

The report looked at publicly available data from 2015 to 2017, prior to the Republicans’ tax cuts taking effect, but it comes as stock buybacks have increased further following the tax law’s passage.

Democrats and Republicans have sparred over whether companies’ share repurchases are beneficial. The Hill’s Naomi Jagoda breaks down the debate here.

 

Prosecution says Manafort opened more than 30 bank accounts overseas: Prosecutors argued Tuesday that former Trump campaign chairman Paul Manafort opened more than 30 overseas bank accounts to try and hide his earnings from lobbying work in Ukraine.

Assistant U.S. Attorney Uzo Asonye said in his opening statement in Manafort’s trial in Virginia, which began Tuesday, that the former Trump associated opened more than 30 bank accounts in three foreign countries. The accounts were used to hold the more than $60 million Manafort earned doing pro-Russian lobbying in Ukraine.

Asonye argued that the government will be able to prove that Manafort did not report the entirety of his income as part of an effort to build an extravagant lifestyle. 

“There’s nothing wrong with being successful or rich, but when you sign a federal tax return you swear you have reported all your income,” Asonye said.

Can’t get enough on the Manafort trial? Our Lydia Wheeler was there in Arlington, Va. and has the recap on day one.

 

MARKET CHECK: Reuters: “U.S. stocks rebounded on Tuesday, boosted by gains in industrial shares following reports of renewed trade negotiations between the United States and China.

“The Dow Jones Industrial Average rose 108.36 points, or 0.43 percent, to 25,415.19, the S&P 500 gained 13.69 points, or 0.49 percent, to 2,816.29 and the Nasdaq Composite added 41.79 points, or 0.55 percent, to 7,671.79.”

 

GOOD TO KNOW

• The Departments of Justice (DOJ) and Labor announced an agreement Tuesday to work together in cracking down on companies that “discriminate” against U.S. workers by hiring foreign workers.
• A new study that puts an astronomical price tag on a Medicare-for-all proposal has prompted mockery from conservatives and defensive cries from liberals.
• President Trump ripped conservative mega-donors Charles and David Koch one day after the political network formed by the billionaire brothers said it would not support a Republican Senate candidate in North Dakota.
• The Senate on Tuesday cleared a short-term extension of the National Flood Insurance Program hours before funding for the program is set to expire.
• AFL-CIO President Richard Trumka, who has previously praised tariffs implemented by President Trump, told CBS News that he believes those measures have gone too far.
• The Chinese government has said that its economy “faces some new problems and new challenges” from mounting global trade tensions, according to The Wall Street Journal.
• Business groups at war with Trump over trade and immigration say they’re taking steps to rebuild the political center — including taking fresh looks at moderate Democrats, according to Politico.

 

ODDS AND ENDS

• Former Council of Economic Advisers Chairman Jason Furman attempts to solve the “wage puzzle.”
• Americans for Financial Reform and the Center for Responsible Lending released a survey Tuesday showing that roughly 80 percent of voters polled are concerned about the Trump administration’s impact on the Consumer Financial Protection Bureau.