Washington Watch: Tax and spending cuts face key House test, landmark crypto and retirement bills gain momentum

All eyes in Washington are on the House of Representatives as leadership whips votes to see if they can send the long-awaited package of tax and spending cuts to the Senate. Partisan divides on this bill will grab headlines in the coming days, but elsewhere there’s bipartisan momentum gathering for a landmark crypto framework and measures to help young workers save more for retirement. We’re also tracking SEC Chair Atkins’ agenda rollout with an early, notable nod to work that would increase retail investor access to private markets.

“Big, beautiful bill” faces key House test – President Trump visited with House Republicans Tuesday to deliver a strong message that Congress needs to stop tinkering and pass the massive reconciliation bill that will make a range of tax cuts permanent and reduce spending for Medicaid and other federal programs. Speaker Johnson hopes to bring the measure up for a vote as early as this week but holdouts in conservative factions of the GOP and lawmakers seeking a higher deduction for state and local taxes (SALT) could delay action further if they don’t answer Trump’s plea. The Senate is expected to change whatever legislation the House initially passes, which adds to lawmakers’ reluctance to take a politically challenging vote that will be used against them on the campaign trail.

Atkins unveils additional SEC priorities – SEC Chair Paul Atkins delivered his first major policy speech, outlining his priority agenda items. Notably, he signaled the Commission will revisit closed-end fund rules with an eye toward increasing investment opportunities in private markets for retail investors. Atkins hopes the work will “give all investors the ability to seek exposure to a growing and important asset class, while still providing the investor protections afforded to registered funds.”

• Atkins also called for the SEC to host a roundtable on the “increasingly complex and lengthy” executive pay disclosures, questioning if they provide investors with material updates.
• He doubled down on his goal to write crypto asset market-related rules to address issuance, custody, and trading.

Senate advances landmark crypto bill – The Senate voted yesterday to advance a landmark crypto bill to create the first-ever U.S. regulatory framework for stablecoins and peg them to the value of the dollar. The vote is a big win for the crypto industry, which has lobbied Congress for years to pass legislation that would help legitimize digital assets. The bill now lies with Senate GOP leaders to put the legislation up for final passage, which will likely happen after the holiday weekend, before it proceeds to the House of Representatives.

Bank capital rollbacks on the horizon – Last week, authorities at the Federal Reserve, Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) announced plans to reduce bank capital requirements, signaling one of the largest policy shifts in over a decade. The biggest anticipated change would reduce the supplementary leverage ratio (SLR), designed to cushion against losses following the Global Financial Crisis. While the cuts would be a boon for big banks, critics are concerned about their timing coinciding with market volatility, so we’ll be watching how this plays out before the proposals are presented this summer.

CFTC leadership in limbo – Last week, two Commodity Futures Trading Commission (CFTC) Commissioners, Christy Goldsmith Romero and Summer Mersinger, announced they would depart from the agency by the end of the month, leaving only two commissioners remaining: Acting Chair Caroline Pham who plans to step down once Trump-nominee Brian Quintenz is confirmed, and Commissioner Kristin Johnson. The CFTC can technically operate with two members, but reaching a consensus on voting-related matters may be challenging with a Republican (Pham and Quintenz) and Democratic (Johnson) split. A few days ahead of her departure, Goldsmith Romero will speak at The Brookings Institution on May 27 on the future of financial services regulation, so we will be listening closely for her take on the direction of the agency.

CFPB continues Biden-era rollback amid uncertain future – The fate of the Consumer Financial Protection Bureau (CFPB) is on the docket, with a three-judge panel considering an appeal to a March court order that mandated the rehiring of the 90% of employees dismissed earlier this year. If the agency remains intact, it will look much different than under previous administrations. Meanwhile, the agency has continued efforts to rollback Biden-era regulations, notably withdrawing a data protection rule, which would have significantly limited the sale of Americans’ private information by data brokers, and revoking the non-bank registry (NBR) rules, requiring non-bank financial firms receiving local, state, or federal enforcement measures to register with the CFPB.

House Financial Services Committee targets bank merger process – In a Financial Institutions Subcommittee hearing last week, Chair and Rep. Andy Barr (R-KY) pointed to the current “broken” system for the review of bank mergers and the need to simplify the regulatory review process. Barr reintroduced the Bank Failure Prevention Act, aimed at holding federal agencies to a pre-determined time limit when reviewing mergers. He also voiced plans to proceed with a Congressional Review Act resolution to overturn a Biden-era OCC merger review rule aimed at holding federal agencies to a pre-determined time limit when reviewing mergers, urging the House to vote on the bill.

Bipartisan Senate bill aims to expand access to employer-sponsored retirement savings – Last week, Senators Bill Cassidy (R-LA) and Tim Kaine (D-VA) reintroduced a bill to help workers start saving for retirement at an earlier age. The Helping Young Americans Save for Retirement Act would lower the minimum age to participate in employer-sponsored retirement plans from 21 to 18. Several large financial planning institutions including Edward Jones, TIAA, and LPL, have already endorsed the bill, which awaits Senate consideration to move forward.

U.S. Chamber of Commerce draws leaders for inaugural Capital Markets Summit – The Chamber’s inaugural event will take place on June 3 in Washington, D.C., convening top White House officials, members of Congress, and financial sector leaders to “discuss how to bolster America’s capital markets and promote effective regulation.” On the agenda: IPO revitalization, nonbank systemic risk, and the evolving role of CFPB oversight.

The Washington Watch team will be tuning in to fireside chats from FDIC Vice Chair Travis Hill, House Financial Services Committee Chairman French Hill, and closing remarks from Deputy Treasury Secretary Michael Faulkender, to hear where they’re driving the agenda in the coming months.

Trump considers alternate routes to codify DOGE cuts – The president is facing an uphill battle to approve DOGE cuts in Congress, with “Republicans warning the White House that it is already facing tough odds in advancing their so-called megabill.” With Congress’ attention on the reconciliation bill, the White House is now looking at a two-year window to codify the cuts and may pursue a fight in the courts to shut down spending unilaterally with executive power.

Executive order tracker – Track President Trump’s 151 orders to-date using the Federal Register.

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