| | | | |  | | By Eleanor Mueller and Katy O'Donnell | | Presented by |  | | | Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.
| | Your hosts wrote exactly one year ago that Congress was facing pressure to address sky-high costs for homeowners and renters — but that there was no clear path to a bipartisan compromise. Now, even as partisan divides in Washington reach new depths, housing legislation could be one of lawmakers’ best shots at coming together. Congressional Republicans have long argued that the only way to make housing more affordable is to roll back regulations, while Democrats have pushed for an infusion of spending. As their talks stall, high home prices continue to freeze the market — which saw the lowest level of sales in 2024 since 1995 as the combination of elevated prices and high mortgage rates kept potential buyers on the sidelines. But this Congress could be different. Senators on and off the Senate Banking Committee told MM this week that they’ve already discussed compromise legislation with colleagues across the aisle that would blend their approaches by using federal resources to incentivize local governments to make manufactured and multifamily housing easier and cheaper to build. And Vice President JD Vance broached the issue to House Republicans earlier this week as something “he’s hearing on the campaign trail, especially between 20 and 30-year-olds,” said Rep. Mike Flood (R-Neb.), who chairs the House Financial Services’ housing subcommittee. “This is a space where I think there's a lot of possibility of bipartisan agreement,” said Sen. Mark Warner of Virginia, one of the most senior Democrats on Senate Banking. “If you put all your efforts simply on the down payment assistance,” as some Democrats have proposed, “that may increase demand — but it doesn't give you more supply.” “Most of housing is done at the local and state level,” Warner added. “But could we give incentives to communities to speed up the permitting process and the regulatory process?” Warner pointed to Virginia’s Henrico County. Its board of supervisors announced last year that they would use data center revenue to help establish an affordable housing trust. “What they do with that is they buy the land underneath, so that means the cost of the house goes down,” Warner said. “They also have the county then waive the sewer connect fees and the permitting fees … and they'll also agree to speed up permitting.” In his first policy interview as Senate Banking chair earlier this week, South Carolina Republican Tim Scott echoed many of Warner’s points. “The things we have in common, from a formulaic perspective, is, No. 1, we need to figure out how to incentivize more housing across the country,” Scott said. “Maybe there's a way for us to encourage, through some federal resources, more housing on the local and the state level — and we create an incentive package.” Scott said he’s discussed the issue with Democrats like Warner and Sen. Peter Welch (D-Vt.). “I think Tim [Scott] is serious about addressing what is a national housing crisis, and he's got an open mind, and he is reaching out to Democrats,” Welch told MM. “There's got to be some resources from the federal government — but there's got to be a lot of cooperation from our local governments that deal with permitting, density issues and construction issues.” Because most housing proposals deal with policy — not spending — they’re ineligible for the reconciliation process, which Republicans want to use to push through partisan measures with only a simple majority. That means they’ll have to bring Democrats like Warner along. The top Democrat on Senate Banking, Elizabeth Warren, said that what Scott, Warner and Welch described makes sense to her — though she wants to ensure it’s one of many proposals the committee weighs, since “when it comes to housing, more is more,” she said. “I've been banging the drum on housing for several years now, yeah, but this time around, it seems like more senators have heard from more of their constituents about just how crazy high prices have gotten,” Warren said. “Hearing from the people back home can be a real incentive to try to strike a deal here in Washington.” It’s THURSDAY — And this is, sadly, your host Eleanor’s last edition of Morning Money. She’s headed to Semafor next month, where she’ll keep covering the economy on the Hill. You can keep in touch with her at @eleanor_mueller — and with your other host, Katy, in the usual places, including kodonnell@politico.com. As always, your steady hand, Sam, is at ssutton@politico.com.
| | | | A message from the Consumer Bankers Association: Keeping the lights on. Paying rent on time. Feeding their families. Overdraft services help consumers in need cover essential expenses. Research shows that 73% of consumers who overdraft frequently do so intentionally, appreciating the service and understanding the fees involved. The CFPB's regulation of overdraft creates arbitrary price caps that ignore the real, transparent costs of providing these services—forcing banks to scale back this lifeline. Learn how CBA is fighting to protect access to overdraft. | | | | | Flood talks flood (among other things) — Rep. Mike Flood, the House Financial Services housing and insurance subcommittee chair, broke down housing with Eleanor Wednesday as part of a broader conversation about flood insurance, fire insurance, and other issues the panel will tackle. Here’s what he had to say about: Reconciliation: Flood nodded to how Financial Services has fewer opportunities within its jurisdiction than other committees because so many of its agencies are self-funded: “The Financial Services jurisdiction, we actually send money to the federal government, as opposed to spend money, net, when you look at it.” Wildfires: Flood “feel[s] very strongly” that fire insurance should be state regulated — but “we're going to have to understand what is the state of property and casualty insurance — in the Los Angeles area at a minimum. And what types of changes should be made to make sure that the state of California can make it easier for people to get home insurance. And look at some of the things states like Florida did after the hurricanes in 1992 to make home insurance more affordable.” GSEs: “There's talk about the potential privatization of the GSEs, Freddie and Fannie. I think that's a 2026 issue. … Ultimately, the administration can do that unilaterally, but if they do it right, they'll have to be pairing it with some reforms that we'd have to work on.” Crypto: “I always thought the stablecoin bill would be the one that passes first, but I think the market structure bill will probably pass first. We’ve done a lot of work on it.” Calendar: After a subcommittee roundtable on the California wildfires Feb. 11, Flood said he hoped to hold hearings on “housing supply issues and HUD programs”: “What could the administration or DOGE cut?” Fed holds line on rates in first Trump-era meeting — “Federal Reserve officials held interest rates steady on Wednesday at their first policy meeting since Donald Trump’s inauguration, in the first test of the president’s approach to the central bank after his return to the White House,” our Victoria Guida reports. Trump “slammed Federal Reserve Chair Jerome Powell for failing to beat inflation, arguing that he would succeed where the central bank chief had not,” Victoria reports. “Trump posted on Truth Social roughly two hours after the Fed announced it would hold interest rates steady to ensure that inflation returns all the way to 2 percent, but his comments didn’t seem to directly criticize that move. That was noteworthy because Trump has often called for lower interest rates to boost the economy, including during his first term as president.”
| | White House rescinds spending freeze — “The Trump administration on Wednesday rescinded its sweeping freeze of federal assistance, which roiled Washington and caused widespread confusion about which programs were affected by the move, according to a copy of the memo obtained by POLITICO,” our Megan Messerly reports. “A federal judge had already put a temporary block on the Trump administration’s actions Tuesday amid the turbulence. Pulte nabs MBA backing for FHFA post — Bill Pulte, Trump’s nominee to lead the Federal Housing Finance Agency, picked up a significant endorsement, securing the backing of the Mortgage Bankers Association, Katy reports. “We believe he brings a wealth of real world, private sector experience to this role at a critical time for the housing Government Sponsored Enterprises,” wrote MBA Chair Laura Escobar and CEO Bob Broeksmit in a letter to Senate Banking leaders. They pointed to Pulte’s experience as CEO of the housing-focused investment firm Pulte Capital Partners and his service on the board of directors of Pulte Homes. “Mr. Pulte has also shown a deep dedication to community development by founding the non-profit Blight Authority,” they added, saying the group had been “instrumental” in clearing blighted homes in Detroit and St. Louis. Treasury moves — Michael Faulkender, Trump’s pick to be the No. 2 Treasury official, has started working at the agency as a counselor to Secretary Scott Bessent while his nomination is pending in the Senate, a Treasury spokesperson confirms to Michael. David Lebryk, the highest-ranking career official at the agency, will remain as the acting deputy Treasury secretary in the meantime. Treasury is also starting to bring on more political appointees beyond the handful Trump announced earlier this year. Tyler Badgley, who most recently was senior counsel at the U.S. Chamber of Commerce, has started as executive secretary. First in MM: Club for Growth weighs in on debanking — David McIntosh, the president of the anti-tax group Club for Growth, is urging Bessent to back “regulatory approaches to prevent broad-based discrimination against conservatives.” Those include a bill Sen. Kevin Cramer (R-N.D.) introduced during the last Congress that would have codified “fair access” rules that were pursued during Trump’s first term.
| | | | Power shifts, razor-thin margins, and a high-stakes agenda. We’ve transformed our coverage—more reporters, more timely insights, and unmatched policy scoops. From leadership offices to committee rooms, caucus meetings, and beyond, our expert reporting keeps you ahead of the decisions that matter. Subscribe to our Inside Congress newsletter today. | | | | | | | House Financial Services Republicans to hold retreat — House Financial Services Republicans will hold their annual retreat at the Library of Congress on Tuesday, three people with knowledge of the plans told Eleanor. Former OMB Director Mick Mulvaney plus ICBA representatives are among those expected to stop by, one of the people said. Another said they expect members to discuss regulations that lawmakers could roll back using the Congressional Review Act.
| | | | A message from the Consumer Bankers Association:  
| | | | | First in MM: Crypto PAC war chest grows to $115 million — The leading cryptocurrency super PAC group is set to announce this morning that it has more than $115 million in the bank to influence the 2026 elections, including at least $10 million in previously unreported contributions. The group — which includes the super PACs Fairshake, Defend American Jobs and Protect Progress — has replenished its war chest ahead of the 2026 midterms after spending more than $130 million in the 2024 cycle to boost industry allies. The PAC network’s top donors — Coinbase, Ripple and Andreessen Horowitz — have each committed more than $20 million to the 2026 haul, as MM has chronicled. The group also said Wednesday that it has reeled in $10 million from Jump Crypto. It ended the 2024 cycle with more than $30 million in unspent funds. Coinbase influence watch — The largest U.S. crypto exchange, Coinbase, is adding a pair of big Washington names — Trump co-campaign manager Chris LaCivita and former Sen. Kyrsten Sinema — to an advisory council that is already stacked with former officials. The additions to the firm’s Global Advisory Council are the latest moves in its high-dollar campaign to influence Washington policy. The firms also added former New York Fed President Bill Dudley and former Inter-American Development Bank Group President Luis Alberto Moreno to the council.
| | Lutnick argues for tough tariff approach — “Commerce secretary nominee Howard Lutnick said Wednesday that he prefers an ‘across-the-board’ approach to imposing tariffs on foreign goods to put pressure on other countries to lower their own barriers to U.S. exports” during his Senate confirmation hearing, our Doug Palmer and Ari Hawkins report. “Lutnick’s comments suggest the new administration hasn’t settled on a single approach to implement the various tariff promises Trump made during the campaign.” Lutnick also said Canada and Mexico are making progress toward avoiding a new 25 percent tariff that could go into force in just days, Doug and Ari report. “As far as I know, they are acting swiftly, and if they execute it, there will be no tariff. But if they don't, then there will be,” he said. Trump’s China shift — “President Donald Trump is threatening steep tariffs on close allies and major trading partners like Canada, Mexico and the European Union, but one unlikely country seems to be escaping much of the president’s early trade wrath: China,” Doug and Phelim Kine report. “During his campaign he repeatedly threatened hitting China with a 60 percent tariff and other trade actions. “Instead, he signed an executive order that seems to delay any decision until after the Office of the U.S. Trade Representative, the Commerce Department and the Treasury Department produce a number of reports to send to the White House by April 1.”
| | | | New Year. New Washington. New Playbook. With intensified congressional coverage and even faster delivery of policy scoops, POLITICO’s reimagined Playbook newsletter ensures you’re always ahead of the conversation. Sign up today. | | | | | | | Trump’s social media venture to move into finance — “President Donald Trump's social media venture has set its sights on a new business line: investing,” our Declan Harty reports. “Trump Media & Technology Group — the parent company of Truth Social whose stock became a major source of Trump's net worth last year — said Wednesday that it plans to launch ‘multiple investment vehicles’ over the course of the year under a new financial services brand called Truth.Fi.”
| | | | A message from the Consumer Bankers Association: The CFPB's regulation of overdraft doesn't just fail Americans trying to make ends meet. It fails to consider the consumer-friendly strides taken by banks to support customer needs, like fee caps and grace periods.
America's banks have worked to empower consumers with the information they need to make informed financial decisions, like low-balance warnings and real-time insights. These innovations were designed with the customer in mind, helping to manage their money more effectively, and access tools designed for their financial well-being.
Restrictive regulations undermine this progress and reduce consumer choice. See what's at stake. | | | | | | | Follow us on Twitter | | | | Follow us | | | | |
