House Speaker John A. Boehner (R-Ohio) declined Tuesday to endorse reauthorizing the Export-Import Bank, an entity many large corporations consider critical for doing business abroad. Boehner said he would consult with Republican colleagues in the coming weeks before deciding how the House should proceed.
The bank’s existence has become the latest flash point between business leaders and conservatives who view the entity is a form of “corporate welfare.” Boehner’s comments are a notable departure from his previous support for reauthorizing the bank, which makes loan guarantees to foreign customers buying from U.S. exporters, especially large aviation firms and defense contractors.
Boehner described the debate as a “rather controversial subject” and said his previous support for the bank didn’t matter now that he is speaker.
“I’ve got a different job than I had then,” he told reporters. “My job is to work with our members to get to a place where the members are comfortable. Some people believe that we shouldn’t have it at all, others believe that we should reauthorize it with significant reforms, and we’re going to work our way through this.”
Boehner’s comments follow remarks by incoming House Majority Leader Kevin McCarthy (R-Calif.), who said Sunday that he supports letting the bank’s charter expire Sept. 30. The Club for Growth and some other conservative groups immediately heralded McCarthy’s comments.
Whether to reauthorize the bank will be the subject of a closely watched hearing of the House Financial Services Committee on Wednesday. The panel is chaired by Rep. Jeb Hensarling (R-Tex.), one of the bank’s most strident critics.
— Ed O’Keefe
The Federal Reserve said Tuesday that it is giving Citigroup and three other big banks another six months to amend their capital plans, changes required after they fell short in the Fed’s annual “stress tests.”
The Fed said it is extending to Jan. 5 the deadline for the third-largest U.S. bank and the U.S. divisions of Britain’s HSBC and the Royal Bank of Scotland, as well as for Spain’s Banco Santander.
The original deadline was Thursday.
In the March stress tests, the Fed ruled that the banks’ capital plans were inadequate. That prevented them from raising their dividends or boosting their stock buybacks.
Citibank has been cutting jobs and trimming some businesses in an effort to improve its finances.
Thirty banks underwent the tests to determine if their capital buffers were sufficient to allow them to keep lending through a financial crisis.
— Associated Press
● U.S. consumers are more confident about the economy than they have been in more than six years. The Conference Board’s confidence index rose to 85.2 this month from a revised 82.2 in May, the private research group said. The June figure is the highest since January 2008, a month after the Great Recession officially began. According to the index, confidence has been rising steadily since bottoming at 25.3 in February 2009. Its level is well above last year’s average of 72.3. But it still hasn’t returned to full health; before the recession, the index usually topped 90.
● Morgan Stanley, owner of the world’s largest brokerage, received about 90,000 applications for its summer program for analysts and associates. More than 1,000 people, or roughly 80 percent who received offers, accepted a spot and began working in the past few weeks, chief executive James Gorman, 55, said in a memo to employees. Wall Street firms have been touting the selectivity of their programs for recruiting junior talent to counter worries that they are accepting less attractive employers in the wake of the financial crisis. Morgan Stanley’s acceptance rate of less than 2 percent is lower than Harvard College’s 5.9 percent for the coming year’s freshman class.
● New York Federal Reserve Bank President William Dudley warned Puerto Rico about its growing debt load and questioned whether the island can sustain its high level of borrowing. During questions after a speech to an accounting group in San Juan, Dudley declined to speculate on whether Puerto Rico would default, but he said “the next three to six months are going to be very, very important.” Dudley also would not comment on restructuring the debt. Some observers say Puerto Rico cannot turn things around without restructuring $70 billion in outstanding debt — a move akin to filing for bankruptcy. In the spring, Puerto Rico hired Wall Street restructuring consultants.
● Whole Foods will pay about $800,000 in penalties and fees after an investigation found the grocery retailer was overcharging customers in California. State and local inspectors discovered that purchased foods weighed less than the labels advertised and that the weight of salad bar containers wasn’t subtracted at the checkout counter, prosecutors said. In addition, the grocer sold prepared foods such as kebabs by the item rather than by the pound, as mandated by law.
● A former Credit Suisse managing director for investment banking, who had pleaded guilty to lying about the value of mortgage-backed bonds in 2007, avoided time in prison after cooperating with prosecutors. David Higgs, a 44-year-old British citizen, waived extradition and voluntarily crossed the Atlantic several times to aid government lawyers, U.S. District Judge Alison Nathan said in Manhattan. She sentenced Higgs to the time he had already served, which, according to his attorney, was the few hours after he turned himself in.
— From news services
● 8:30 a.m.: First-quarter gross domestic product; durable goods for May.
● Earnings: Monsanto.