CFPB Announces Regulatory Targets
On Thursday, the new Consumer Financial Protection Bureau (CFPB) outlined six areas that could be subject to its supervision. The six areas include debt collection; consumer reporting; consumer credit; money transmitting/check cashing; prepaid cards; and debt consolidation. The Bureau also identified automobile loans and personal loans as large sectors that could fall under its supervision. However, the Bureau is prevented from regulating non-bank firms until it has a Senate-confirmed director, a position that will be difficult to fill given Senate Republicans’ pledge to block anyone President Obama nominates for the job. Republicans have said they will block the nomination unless changes are made to the agency’s structure, including making it a five-member commission rather than headed by a single director. The CFPB is expected to officially begin operations in July.
Cantor Pulls out of Biden Debt Limit Negotiations
On Thursday, House Majority Leader Eric Cantor (R-VA) announced that he was withdrawing from Vice President Biden’s debt limit negotiations over whether tax increases should be included in the deal. The only other Republican in the group, Sen. Jon Kyl (R-AZ), also withdrew citing the President’s involvement as the only remedy to break the logjam. The suspension of the group’s efforts could mark the start of the final stage of negotiations, which most participants had long assumed would be concluded by the President, Speaker John Boehner (R-OH), and Senate Majority Leader Harry Reid (D-NV). While it had been assumed that the Congressional leaders and the President would ultimately have to strike the final deal, the Biden talks were expected to extend at least through the end of June.
Greece Secures Second Bailout
On Friday, Prime Minister George Papandreou announced that Greece had secured a second bailout from the European Union and the International Monetary Fund totaling $156.83 billion. For Greece to receive the money, the country’s parliament must approve next week a multi-billion dollar austerity package that includes higher taxes and cuts to government programs.
White House Announces Release from Oil Reserve
On Thursday, President Obama announced the Strategic Petroleum Reserve would release 30 million barrels of oil. The decision sparked a plunge in crude oil prices in the U.S. and Europe. According to Energy Secretary Steven Chu, the oil will be released over the next 30 days and constitutes half of the 60 million barrels that the nations in the International Energy Agency plan to bring to market. Chu also said that the Energy Department estimates that the conflict in Libya has caused a loss of roughly 1.5 million barrels per day from global oil markets.