Issa Review, EU Banks, Truckers’ Rest: Compliance

U.S. Representative Darrell Issa is asking companies and business groups including Toyota Motor Corp. and the National Association of Manufacturers to suggest government regulations to be investigated by his House Oversight and Government Reform Committee.

In a letter sent last month to more than 150 companies, trade associations and research groups, the incoming committee chairman said it will examine regulations that “negatively impact the economy and jobs.” Issa, of California, will take over the committee when Congress convenes today with Republicans in the House majority.

Kurt Bardella, an Issa spokesman, said the goal of the letter is to engage with groups that have been alienated by what the congressman views as an anti-business climate in the administration of President Barack Obama that has hurt job creators.

Other companies and organizations that received the letter include Duke Energy Corp., the Association of American Railroads and the National Petrochemical & Refiners Association.

Brad Woodhouse, spokesman for the Democratic National Committee, said it shows the Republican Party isn’t interested in protecting middle-class families.

Compliance Policy

Too-Big-to-Fail Banks Face Trade Limits Under EU Plan

The European Union may give regulators powers to block new products and limit trading risks at banks deemed too big to fail, as part of plans to protect public finances from future financial crises.

National regulators of cross-border banks may be able to require “changes to legal or operational structures” if the lender would need “extraordinary public financial support” during a crisis, according to draft proposals obtained by Bloomberg News.

The EU is also proposing measures “requiring the credit institution to limit its maximum individual and aggregate exposures” or forcing banks to “limit or cease” some activities, according to the document, dated December 2010.

Regulators should assess lenders and “satisfy themselves that critical functions could be legally and economically separated from other functions” during a crisis, according to the draft proposals. The EU is aiming to avoid a repeat of the financial crisis that followed the 2008 failure of Lehman Brothers Holdings Inc. and resulted in European governments setting aside more than $5 trillion to support banks.

The Brussels-based European Commission, the executive arm of the EU, is scheduled to propose the measures as early as this week. It will seek views from banks, consumers and investors on the plans before submitting a final proposal for discussion with the 27 EU member states later this year.

U.S. Trucker Rest Rules May Signal End of All-Night Runs

Trucking companies accustomed to letting drivers haul goods all night may face U.S. restrictions that would curb the practice and might add almost $2 billion to the industry’s annual operating costs.

The rules, which a U.S. Transportation Department agency proposed Dec. 23, may cut an hour of driving time per day for the nation’s 1.6 million long-haul truck drivers. Truckers also would have to take breaks after driving seven consecutive hours, and wouldn’t be allowed to work as many consecutive days of long shifts as they can now.

Dave Osiecki, vice president of policy and regulatory affairs at the Arlington, Virginia-based American Trucking Associations, said the group may challenge the proposed rules because the restrictions are unnecessary and reduce productivity “likely with no safety or health benefits.”

If enacted, the rules may cost the industry as much as $1.8 billion yearly, according to a Bloomberg Government analysis. The trucking association puts the cost at $2.2 billion a year, citing a 2007 analysis by the U.S. Federal Motor Carrier Safety Administration, the agency that proposed the changes and is taking comments on them. It’s required to publish a final rule by July 26.

For more, click here.

Seventeen U.S. Stocks Halted by Circuit Breakers Since June

Trading in seventeen companies was halted by U.S. circuit breakers since they were implemented in June, according to data compiled by Bloomberg. Four of the companies had their trading halted more than once, the data showed.

The curbs were created after the 20-minute rout on May 6 briefly erased $862 billion from the value of U.S. shares before prices rebounded. The pause lasts five minutes for Standard & Poor’s 500 Index and Russell 1000 Index companies as well as more than 300 exchange-traded funds when they rise or fall at least 10 percent within five minutes.

For a table of the companies, click here.

China to Start Collective Negotiations for Firms, Daily Says

China will introduce collective wage negotiations in all enterprises during the next three years in a bid to reduce labor disputes, the China Daily reported yesterday, citing Zhang Jianguo, head of the All China Federation of Trade Union’s collective contract department.

Mediation organizations received about 406,000 labor dispute cases last year, an increase of 12.1 percent from 2009, the newspaper reported, citing the trade union federation. Low pay and slow wage increases are to blame for the rise in disputes, the report cited Li Shouzhen, spokesman for the federation, as saying.

China Plans ‘Road Map’ for Bank Scrutiny, Financial News Says

China’s banking regulator will issue a framework and a “road map” for scrutiny of banks’ capital at an “appropriate time,” the Financial News reported, citing Liao Min, a spokesman at China Banking Regulatory Commission.

Provision coverage ratios at Chinese banks are all higher than 150 percent of non-performing loans, with some as high as 190 percent, the newspaper reported, citing Liao.

Compliance Action

Wilmington Trust Reclaimed $2 Million From CEO Because of TARP

Wilmington Trust Corp., the recipient of a $330 million taxpayer bailout, took back about $2 million in pay from Chief Executive Officer Donald Foley because the compensation broke U.S. Treasury Department rules.

Delaware’s largest bank withdrew the payments Dec. 22 “in order to be in full compliance” with rules for the Troubled Asset Relief Program, bank spokesman William Benintende said in an e-mailed statement. The revoked pay includes a $1.75 million signing bonus in cash and restricted stock, and additional restricted shares valued at about $248,000 when they were granted, regulatory filings show. The stock has since fallen.

Treasury sought to stabilize the banking system by pumping $205 billion into 707 financial firms through TARP’s Capital Purchase Program beginning in 2008. Along with the cash came restrictions meant to keep executives from profiting from bailouts. The rules ban cash bonuses and limit incentive payments in restricted stock to one-third of a top executive’s total pay.

Wilmington Trust declined to comment beyond the statement. Foley acknowledged the company’s decision to rescind terms of the package, according to the December filing. Since becoming CEO, “Mr. Foley has worked tirelessly and effectively to address both the challenges and opportunities facing Wilmington Trust,” the bank said in the e-mailed statement.

For more, click here.

Treasury Said to Plan Sale of Ally TruPS as Soon as This Month

The U.S. Treasury Department may sell as much as $2.5 billion of Ally Financial Inc. trust-preferred securities this month as it looks to recoup bailout funds for taxpayers, a person with direct knowledge of the plan said.

Treasury will look to sell at least $1 billion of the securities to investors in January or “shortly after” fourth- quarter earnings are announced in February, said the person, who asked not be named because the plans are private. Timing of a sale depends on the state of capital markets, the person said.

The Federal Reserve is likely to rule that the securities can continue to count as Tier 1 capital, making them more attractive to investors, the person said. Treasury holds $2.67 billion in TruPS issued by Detroit-based Ally.

Ally, the auto and home lender that benefited from a $17.2 billion bailout from U.S. taxpayers, moved closer to regaining its independence last week as the government converted $5.5 billion of preferred stock into common shares. Treasury said it would begin selling the TruPS, with Ally’s help, “as soon as practical,” according to a Dec. 30 statement.

Gina Proia, an Ally spokeswoman, declined to comment.

For more, click here.

Warren Plans Information-Sharing With States on Payday Lenders

Elizabeth Warren, the White House adviser assigned to set up a U.S. consumer financial-protection bureau, plans to share information with state regulators to streamline oversight of nonbank firms such as payday lenders.

Under an agreement announced yesterday, the new bureau will exchange information about banks and non-bank financial companies that are normally examined by state supervisors, said Thomas Gronstal, Iowa’s superintendent of banking and chairman of the Conference of State Banking Supervisors.

The information-sharing agreement will allow the consumer bureau to take advantage of states’ expertise in ensuring U.S. rules are being followed, Gronstal said. When state examiners turn up violations they will be able to pass them along to attorneys general or the consumer bureau for enforcement action.

Warren, 61, the Harvard University professor appointed by President Barack Obama in September, is establishing oversight of non-bank lenders under the Dodd-Frank Act.

For more, click here and click here.

China’s NDRC Issues Rules Against Pricing Monopolies

China’s National Development and Reform Commission issued rules to prevent and stop pricing monopolies, according to statements posted on the website of the country’s top economic planner yesterday.

Belgium May Gain From Liechtenstein Tax Probe, De Tijd Says

Belgium may be able to recover about 16 million euros ($21 million) from a tax-evasion probe into Liechtenstein investors, De Tijd reported, citing a spokesman for the Belgian tax authorities.

The Belgian investigation is based on data Germany acquired from an employee of Liechtenstein private bank LGT Group, De Tijd said.

SEC Examines Private Company Disclosure Rules, WSJ Reports

The U.S. Securities and Exchange Commission is exploring whether disclosure rules for closely held companies need to be updated, the Wall Street Journal reported, citing unidentified people familiar with the matter.

The SEC’s review was in response to a Goldman Sachs Group Inc. agreement with Facebook Inc. that would allow some of the bank’s clients to buy as much as $1.5 billion of equity in Facebook, the newspaper said.

The SEC hasn’t found that the agreement between Goldman Sachs and Facebook violated any rules, the newspaper said.

Goldman Sachs and Facebook declined to comment, according to the report.

Interviews/Speeches

Beim Says Goldman’s Facebook Buy May Invite SEC Scrutiny

Nick Beim, general partner at Matrix Partners, discussed Facebook Inc.’s valuation after Goldman Sachs Group Inc. and Digital Sky Technologies were said to have bought a $500 million stake in the social-media company.

Beim spoke with Deirdre Bolton on Bloomberg Television’s “InsideTrack.”

For the video, click here.

Comings and Goings

Niesr Appoints Cabinet Office’s Portes as New Director

The National Institute of Economic and Social Research named Jonathan Portes as its new director.

Portes, currently chief economist at the U.K. Cabinet Office, will start his new role on Feb. 1, Niesr said in an e-mailed statement today in London.

To contact the reporter on this story: Carla Main in New Jersey at cmain2@bloomberg.net.

To contact the editor responsible for this report: David E. Rovella at drovella@bloomberg.net.

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