Overnight Regulation: All major banks pass Fed’s ‘living will’ test | EPA drops contract with GOP oppo firm | Uncertainty high after net neutrality repeal | SEC halts trading in bitcoin-based firm

by Lydia Wheeler - 12/19/17 5:54 PM ET

Welcome to Overnight Regulations, your daily rundown of news from the federal agencies, Capitol Hill and the courts. It’s Tuesday evening here in Washington where the House passed a tax reform bill with the Senate expected to do the same this evening. But the House will have to vote for the bill again tomorrow. Details here.

THE BIG STORIES

The Federal Reserve announced Tuesday that all eight globally important banks it oversees produced passable plans that outline how they would disassemble without shocking the economy.

As The Hill’s Sylvan Lane reports, four of the eight largest banks under Fed supervision filed resolution plans or “living wills,” with no shortcomings.

The Fed said that Bank of New York Mellon, Citigroup, J.P. Morgan Chase, and State Street all submitted satisfactory plans for how they would break apart their banks upon failure without triggering an economic crisis.

The Fed found shortcomings in plans produced by Bank of America, Goldman Sachs, Morgan Stanley, and Wells Fargo. The banks will have to submit updated plans that address the flaws, which were not serious enough to warrant a failing grade.

The Dodd-Frank Act of 2010 requires the largest U.S. banks with international operations to submit living wills to the Fed for approval each year. That provision is intended to prevent banks from triggering financial panics upon sudden failure. It was crafted in response to the implosions of Lehman Brothers, Bear Stearns, AIG and other large firms that triggered the 2008 crisis.

Read the full story here.

The Environmental Protection Agency ended its contract Tuesday with an opposition research firm over its ties to Republican advocacy groups and causes.

As Mallory Shelbourne and Timothy Cama report, an EPA spokesperson confirmed the end of the no-bid, $120,000 deal with Definers Public Affairs,

The agency had previously said the contract, first reported last week by Mother Jones, was for “media monitoring” services.

“How we consume our news has changed, and we hope to find a vendor that can provide us with real-time news clips at a rate that is cheaper than our previous vendor,” said EPA spokesman Jahan Wilcox.

The news was first reported by The Washington Post and came the same day a pair of Democratic senators called on EPA Administrator Scott Pruitt to terminate the contract, saying Definers Public Affairs’ close ties to GOP causes “presents an appearance of impropriety to which you as administrator should never be a party.”

The cancellation comes after The New York Times reported last week that an executive with Definers had been investigating EPA employees who were critical of Pruitt and the Trump administration agenda.

Definers Vice President Allan Blutstein said he was probing anti-Trump “resistance”

Read the full story here.

ON TAP FOR WEDNESDAY

The House Committee on Education and the Workforce will hold an oversight hearing to examine the policies and priorities of the Education Department. Education Secretary Betsy DeVos will testify before the committee.

REG ROUNDUP

Technology: The Federal Communications Commission’s (FCC) vote last week to scrap net neutrality rules has sparked a vigorous debate about what comes next.

FCC Chairman Ajit Pai and his allies believe the deregulation will induce a new wave of investment in broadband, leading to increased competition and better and cheaper internet for consumers.

Net neutrality advocates, on the other hand, argue the end of the rules will ultimately result in higher costs for consumers, with broadband providers now free to pursue deals with internet companies like Netflix and YouTube.

The effects of the FCC’s policy change will not be clear for some time, experts say.

Ali Breland has the story here.

Technology: Rep. Marsha Blackburn (R-Tenn.) on Tuesday introduced a bill that would replace some of the net neutrality rules that the Federal Communications Commission (FCC) repealed last week, though critics say that the legislation falls short of the FCC’s protections.

Blackburn’s bill would prohibit internet service providers from blocking or throttling web content. But it would still allow companies like Verizon and Comcast to charge websites for faster data speeds and it preempts states from implementing stronger net neutrality protections.

Groups that tried to prevent the FCC’s rollback say that the bill is just a watered-down version of the popular rules.

Harper Neidig has the story here.

Finance: The Securities and Exchange Commission (SEC) has suspended trading on shares of The Crypto Company, which deals in digital currencies, after its stock surged by roughly 2,700 percent in the past month.

Regulators said their decision was based on the “accuracy and adequacy of information in the marketplace” about The Crypto Company. In particular they raised concerns about “the compensation paid for promotion of the company, and statements in Commission filings about the plans of the company’s insiders to sell their shares of The Crypto Company’s common stock.”

“Questions have also arisen concerning potentially manipulative transactions in the company’s stock in November 2017,” the SEC said in announcing the suspension.

The SEC’s action against The Crypto Company comes amid an enormous rally in cryptocurrencies. In recent weeks, the highest market capitalization digital currencies like bitcoin and Ethereum have exploded in value as investors rush in.

Ali Breland again with the story here.

Courts: The Trump administration has asked the Supreme Court to intervene and stop one of two undocumented immigrants in federal custody from having an abortion.

A federal district court judge issued a temporary restraining order Monday to stop administration officials from preventing two 17-year-old girls, known in court documents as Jane Roe and Jane Poe, from having the procedures.

But the government right now is only appealing the abortion of Roe, who according to court documents is about 10 weeks pregnant. The government said only that there are “differing circumstances surrounding Ms. Poe’s case.”

Find the story here.

Tech: Germany’s competition watchdog says that Facebook has abused its dominant market position to unfairly collect data on its users.

The country’s Federal Cartel Office said on Tuesday that it is most concerned with the firm’s collection of data in its apps outside of Facebook, such as Instagram and WhatsApp, which are then processed within Facebook.

“We are mostly concerned about the collection of data outside Facebook’s social network and the merging of this data into a user’s Facebook account,” said Andreas Mundt, the president of Germany’s competition authority. “This even happens when, for example, a user does not press a ‘like button’ but has called up a site into which such a button is embedded. Users are unaware of this.”

Mundt said that, because of this, the Federal Cartel Office was not convinced that users could give “effective consent” to Facebook in its data collection practices.