Rescission Overview

Reports indicate the Trump administration is preparing a “rescissions package” to send to Congress. What is a rescission and how does the process work?

BGR Announces Three Promotions

Congratulations are in order! Today, BGR is proud to announce the promotions of Ellen Brown, Ansley Haulbrook, and Anna Reese Couhig.

Ellen will serve as a Director with the State and Local Advocacy Practice, Ansley will serve as a Policy Analyst with the Financial Services and Tax Practice, and Anna Reese will serve as a Policy Analyst with the Appropriations and State and Local Advocacy Practices!

Thank you to Ellen, Ansley, and Anna Reese for their hard work and dedication!

BGR Welcomes Jen Brown

JEN BROWN JOINS BGR GROUP AS VICE PRESIDENT

Will focus on financial services, digital assets, and tax policy

Washington, D.C. (January 29, 2025) – BGR Group, Washington, D.C.’s premiere bipartisan lobbying and public relations firm, announced today Jen Brown is joining the firm as a Vice President in its Financial Services Practice. A seasoned veteran of both the Legislative and Executive Branch, Jen will help clients navigate the complex regulatory and political landscape of financial services, digital assets, retirement/ERISA, and tax policy.

“We are thrilled to have Jen join the bipartisan BGR team,” BGR Group Chairman and CEO Bob Wood said. “Her breadth of knowledge and expertise on financial services and tax issues is unmatched. She will be a tremendous asset to our entire firm and our clients.”

Jen joins BGR Group from Capitol Hill where she served as the Banking Counsel to Senate Democratic Leader Chuck Schumer (D-NY) from 2023 to 2025 during his service as Senate Majority Leader. She advised the Leader on issues affecting the financial services sector including digital assets, cannabis banking, and anti-money laundering (AML) and Bank Secrecy Act (BSA) requirements. Jen also represented the Democratic Leader in negotiations between Senate and House leadership, Congressional Committees, and the Executive Branch on all financial services legislation before the Congress. Jen also advised Leader Schumer during the collapse of Silicon Valley Bank and Signature Bank and the proposed Basel III regulations.

Jen also served as the Tax Counsel to a Senior Senate Finance Member and the Chairman of the Senate Foreign Relations Committee and as the Economic Policy & Oversight Counsel to House Small Business Committee Chairwoman Nydia Velazquez (D-NY-7), where she was instrumental in the development, passage, and implementation of the CARES Act, American Rescue Plan (ARP), Inflation Reduction Act (IRA), and SECURE 2.0 during the COVID-19 pandemic and subsequent economic recovery. 

Prior to her time on Capitol Hill, Jen led economic policy work for UnidosUS, the nation’s largest Hispanic civil rights and advocacy organization. In this role, she was responsible for the organization’s efforts related to the Community Reinvestment Act (CRA), SECURE Act, state retirement savings plans, and the implementation of the Tax Cuts and Jobs Act (TCJA) and the Economic Growth, Regulatory Relief, and Consumer Protection Act, S.2155.

Jen also worked as the Manager of Research at the National Institute on Retirement Security (NIRS) where she routinely testified in front of Congress and advised federal and state lawmakers on the intersection of retirement and tax policy.  Additionally, Jen served as an Employee Benefits Law Specialist for the U.S. Department of Labor’s Employee Benefit Security Administration’s Office of Exemption Determinations where she drafted complex individual exemptions and helped to finalize regulations mandated by the Dodd Frank Act. 

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Matt Hoffmann Rejoins BGR Group as Co-Head of Financial Services Practice Group

Senior Republican Financial services expert will focus on blockchain technology, banking, capital markets, and digital assets.

Washington, D.C. (December 6, 2024) – BGR Group, Washington, D.C.’s premiere bipartisan lobbying and public relations firm, announced today that Matt Hoffmann is returning to the firm as a Principal and Co-Head of its Financial Services practice. Most recently, Matt served as Director of Regulatory and Government Affairs for Digital Asset, a blockchain technology company. He has also served in several high-profile positions on Capitol Hill including as the Republican Staff Director for the House Financial Services Committee and as a senior advisor in the Office of the Speaker of the House. In his role with BGR’s Financial Services practice, Matt will focus on issues including banking, capital markets, digital assets, regulation of the crypto industry, and renewal of the Tax Cuts and Jobs Investment Act (TCJA).

“We are thrilled to welcome Matt back to the BGR team,” BGR Group Chairman and CEO Bob Wood said. “Matt is an outstanding colleague and true expert when it comes to financial services, budget, and fiscal policy. He will be a tremendous asset to our firm and our clients as we navigate upcoming tax and financial services policy debates.”

Matt is a Capitol Hill veteran who has served in key roles on both the House and Senate side. As the Staff Director for the House Financial Services Committee, he was the chief advisor to Chairman Patrick McHenry (R-NC) and helped manage committee business including its response to the 2023 banking crisis, advancement of capital market reforms, and creation of the first-ever Digital Assets, Financial Technology and Inclusion Subcommittee. Matt was also instrumental in the Financial Innovation and Technology for the 21st Century Act (FIT21), and other legislation including the Expanding Access to Capital Act, and the Middle Class Borrower Protection Act. During his previous stint at BGR Group, Matt worked across practice groups, including with the Health and Life Sciences and Financial Services practice groups, where he provided policy analysis and strategic counsel to clients. Prior to that, Matt served as Policy Director at the Senate Finance Committee and as a senior advisor to former Speaker of the House Paul Ryan (R-WI) during his service on the House Budget and Ways and Means Committees, and eventually in the Speaker’s office.

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BGR Op-Ed: What Will Trump Do With Economic and Foreign Policies?

BGR Group Advisory Board Member Heather Nauert and Financial Services Vice President Keaghan Ames analyze how a second Trump administration could reshape economic and foreign policies, with an emphasis on energy independence and a more assertive international stance.

What to Expect: Tax Reform

What will happen with the Tax Cuts and Jobs Act in 2025? BGR’s Financial Services and Tax team examines the timeline, biggest issues, and key players that will drive the debate.

BGR Welcomes Charles Dahan

BGR WELCOMES FINANCIAL SERVICES FELLOW CHARLES DAHAN

Charles Dahan has joined BGR Group as a Financial Services Fellow. In this role, he will be working with the Financial Services practice to provide background and expertise on a wide range of financial services issues. He brings with him an extensive background in financial services policy and education.

Charles previously worked at the Credit Union National Association where he managed all policy research as well as serving as a subject matter expert for topics including interchange legislation, veteran lending, access for credit unions to federal infrastructure funding deposits, and market intelligence on credit union growth and member services.

He also previously worked at Stanford University in the Department of Political Science, specifically as the program director for Naturalize New York, a multi-million-dollar grant project in coordination with the Robin Hood Foundation that measured factors driving likelihood of naturalization for eligible American residents as well as their economic performance.

While a Ph. D Candidate in political science at the University of Florida, Charles published peer-reviewed articles in top social science journals on topics ranging from American political behavior to public opinion measurement. He also taught courses in public opinion measurement, statistical research methods, the intersection of religion and politics in the United States, and the American political behavior at the University of Florida and University of North Carolina.

Charles has also created statistical models for the publication Baseball Prospectus that were used to evaluate college and minor-league baseball players. Additionally, he covered minor league teams throughout California for the publication.

 

SEC Climate Rule Analysis by BGR

By Keaghan Ames, Vice President, BGR Financial Services Practice

When the Security and Exchange Commission’s (SEC) proposed climate disclosure rule was first announced in March of 2022, it consequently caught the attention of every publicly-traded company. In what many consider to be the most onerous enhancement to the securities disclosure regime since the Securities Act of 1933, the rule, if finalized, would change the way publicly traded companies view the climate’s impact and the risks associated not only in their public disclosures but potentially throughout their entire business.

Will Scope 3 be Included and When’s it Getting Finalized?

The two questions everyone is asking: will Scope III be included and when will it be finalized? The final rule has been expected for many months, with initial speculation as to its release beginning in Q3 of 2023. Yet, the rule continues to be delayed. Why?

The short answer is that the decision around whether to include Scope III is dragging the process out, due to the concerns over its ability to withstand legal scrutiny.

The longer answer is that SEC Chair Gary Gensler finds himself in a difficult position. For starters, if Scope III requirements are included in the overall rule, numerous outside groups have publicly warned the SEC it will face litigation, which is the last thing the head of the agency wants. Beyond the very real litigation risk and external political pressures detailed below, there are internal political factors for Chair Gensler to consider as well. The SEC’s decision-making boils down to three viewpoints:

(1) Chair Gensler’s, who would like to see Scope III included, but not at the expense of the rest of his regulatory agenda;

(2) Democratic Commissioner Caroline Crenshaw’s, who believes Scope III should be mandatory and may not vote for any final rule without the inclusion of Scope III (thereby shelving the proposal as any rule would require all three Democratic votes); and,

(3) the Office of the General Counsel’s (OGC), who understands that Scope III is potentially a stretch of SEC authority and contains near-certain litigation risk.

While the rumors will continue to percolate as to when the rule will come out, the real answer is either (a) when these three parties come to an agreement or (b) negotiations end and there is no compromise to be struck between those three viewpoints. If the likelier latter scenario (option B) plays out and Gensler determines that he would like to include Scope III, it is foreseeable that Gensler pushes finalization as close to the Congressional Review Act (CRA) window as possible. The CRA window, Congress’ 60 legislative days-long period of time to overturn any given rule by a majority vote, is usually sometime in mid-May heading into an election year. According to the congressional schedule set by leadership in both Houses, the deadline, for now, is estimated to be May 14, 2024.

At the time of this post, the rule is rumored yet again to come out next month (that being said, the same rumor has circulated every month for the last six months). That timeline is certainly possible, and the public will be given a five-day Sunshine Act notice prior to an open meeting to consider the rule. However, if Gensler was truly worried about balancing the rest of his regulatory agenda (all items require OGC’s attention and focus) and getting the climate disclosure rule with Scope III finalized prior to the CRA window, it would seem fitting that the rule is finalized in late April or early May.

As always, we continue to track developments on the rule and will continue to update the group and your clients accordingly.

Process Background

The SEC’s proposal seeks to standardize climate disclosures through mandatory tiers of climate exposure:

  • Scope 1: registrants’ direct greenhouse gas (GHG) emissions;
  • Scope 2: indirect GHG emissions from purchased electricity and other forms of energy separately disclosed, expressed both by disaggregated constituent greenhouse gases and in the aggregate, and in absolute terms, not including offsets, and in terms of intensity (per unity of economic value or production; and,
  • Scope 3: everything else associated with a company’s activities including emissions from third-party contractors, employee commuting, business travel, purchased goods and services, leased assets, etc.

Comprehensibly, the entire proposed rule could prove onerous for several publicly traded companies. The inclusion of Scope III has been heavily criticized, given the SEC prioritized its “materiality” threshold for disclosures (see SEC Chair Gensler’s argument on materiality). On the above requirements, several energy companies have long had to disclose Scope I and certain Scope II emissions under EPA guidelines. Scope I and Scope II would prove difficult (yet not unforeseen) for all non-energy companies to begin calculating and for all companies to begin disclosing to shareholders. Furthermore, Scope III disclosures would be extremely difficult for numerous reasons, not the least of which is, there is no standard methodology proposed by the SEC for calculating the universe of Scope III disclosures. Thus, companies could spend millions on regulatory burn just for the SEC to tell them their methodology for calculating Scope III is incorrect.

Argument Background

Needless to say, various industries ranging across traditional financial services, energy, healthcare, transportation, and even traditional agriculture have expressed significant concerns about the proposal over the last two years. Last week’s House Financial Services Subcommittee on Oversight and Investigations hearing focused on the legal grounds for challenging the SEC’s authority to even propose Scope III requirements. (See the Chamber of Commerce’s letter stating “[h]owever, the SEC’s Proposed Rules, as currently crafted, exceed the SEC’s lawful authority and are vast and unprecedented in their scope, complexity, rigidity and prescriptive particularity.”)

Even certain Democrats in Gensler’s own party find the rule overly burdensome, such as Senator Jon Tester (D-MT).

The SEC has stated that its goal for this rule is to provide “consistent, comparable, and reliable – and therefore decision-useful – information to investors.” Ensuring that climate risk-related information is available to investors is core to the SEC’s statutory authority and a response to increasing investor demand for this information. Opponents argue that the SEC is overstepping its authority as Scope III disclosure would require publicly traded companies to obtain information from privately held companies, who are outside the SEC’s regulatory authority. Opponents also point to privacy and confidentiality concerns given the amount of data that may need to be disclosed. The SEC has faced notices of potential legal action should Scope III make it into the final rule but has also received pressure from left-wing and climate groups and some Democratic lawmakers to keep Scope III included.

Analyzing the Basel III Proposal

BGR Financial Services Practice Head Andy Lewin, Keaghan Ames, and Advisory Board Member Brigit Polichene break down the latest banking standards proposal known as Basel III.

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BGR Deep Dives: Breaking Down the Basel III Endgame Implementation

By Keaghan Ames, BGR Vice President, Financial Services Practice

Late last week, the banking regulators (Federal Reserve, FDIC, and OCC) issued the long-anticipated proposal that aims to implement changes from 2017 to international capital standards (the “Endgame Standard”) adopted by the Basel Committee on Banking Supervision (“Basel Committee”). However, the beltway is abuzz over the fact that the proposal goes far beyond the proposed changes from the Basel Committee and instead aims at fundamentally increasing the amount of capital large ($250 billion +) and medium-sized ($100-250 billion) banks are required to carry.

The most noticeable deviation from the proposed international Basel III changes entails the rollback of legislative and regulatory tailoring reform resulting from Congressional adoption of S.2155. By way of background, only six years ago Congress passed, with bipartisan support, S.2155, a law that would tailor banking regulation for firms based on various risk factors, not size alone. Last week’s proposal deviates from the resulting tiered framework using the recent bank failures of SVB and Signature, which were considered risk management and supervisory failures, as a justification for the regulators to treat any bank with over $100 billion in assets the same as the largest U.S. bank.

Many banks are individually assessing how the thousand plus page proposal will impact their operations. At a high level, the proposal will fundamentally modify the current capital regime by increasing the amount of capital all banks over $100 billion in assets must carry. The regulations are expected to increase common equity tier 1 (CET1), which is primarily common stock of banks, by 16%. To say this will be onerous for the top 40+ impacted banks would be an understatement. It also changes how affected bank holding companies will have to calculate their capital requirements, adding a new expanded risk-based calculation in addition to the existing standardized approach. Under this dual-stack requirement, banks will be required to hold the higher of the two-risk weighted asset amounts to satisfy their capital requirements. The proposal also adds a number of other significant regulatory burdens and changes including eliminating the use of internal models to assess credit and operational risks, requiring medium-sized banks to unnecessarily switch their calculation of counterparty risk of derivatives exposure, including derivatives when calculating the cross-jurisdictional activity risk factor, adding counter-cyclical capital buffers for banks that pose little macro-economic threats (e.g., not too-big-to-fail), and requiring all banking organizations with more than $100 billion in assets to reflect unrealized gains and losses on available-for-sale securities in regulatory capital.

The expansion of the capital proposal is not entirely unexpected, but is still unfortunate as it will ultimately increases costs for the American public and retail and commercial borrowers. Whenever banks are required to hold more capital, it affects their ability to lend that capital back out to small businesses and the investing public. As it is, the credit markets are already in a slightly tumultuous time given the commercial real estate challenges and high mortgage interest rates.

Given the bleak picture painted by the proposal, the industry needs to vigorously advocate for changes to the final rule. There are both regulatory and congressional advocacy paths available to deal with the proposal. On the regulatory front, there were significant dissenters in the Fed and the FDIC who highlighted some procedural and substantive concerns with the proposal including the overly broad scope. Fed Chairman Powell said in his statement on the proposal, “While there could be benefits of still higher capital, as always we must also consider the potential costs.” Suffice it to say the costs of the proposal are significant and banks would be wise to highlight these substantive issues and the absence of a cost-benefit analysis in the proposal with the regulators over the 120-day comment period.

On the Hill, there are members on both sides of the aisle who fought and voted for S.2155. These members will be motivated to protect established law over the proposed regulation. With election season just around the corner, the economy is sure to be a dominant political topic. The potential for an unnecessary squeeze on credit lending will be an important discussion in the months ahead.