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Speaker 1: This is Bloomberg Law.

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Speaker 2: Are plaintiff's leries involved in a kind of competition in Congress?

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Speaker 2: Force a judicial code on the justices?

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Speaker 1: Interviews with prominent attorneys in Bloomberg Legal experts.

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Speaker 2: My guest is former federal prosecutor Robert Mintz. Joining me

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Speaker 2: is Bloomberg Law reporter Kyle Janner.

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Speaker 1: And analysis of important legal issues, cases and headlines.

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Speaker 2: Is it unusual a grand jury like this to suspect

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Speaker 2: people aren't telling the truth? One of the first times

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Speaker 2: the Justice Department has called for the breakup of a

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Speaker 2: major company.

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Speaker 1: Bloomberg Law with June Grasso from Bloomberg Radio.

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Speaker 3: Welcome to Bloomberg Law on Bloomberg Radio. I'm Madison Mills

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Speaker 3: in for June Grasso. This week. Two big headlines today,

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Speaker 3: both for the top contenders so far in the twenty

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Speaker 3: twenty four election. We've got former President Trump. He has

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Speaker 3: a new trial date. Meanwhile, President Biden's son reaching a

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Speaker 3: deal on US tax crimes, just as the President himself

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Speaker 3: heads to San Francisco for meeting with experts in the

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Speaker 3: AI space. We're going to cover all of that, but

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Speaker 3: first let's start with the Hunter Biden news. Because the

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Speaker 3: President's son will plead guilty to two misdemeanor tax crimes

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Speaker 3: in an effort to avoid a separate gun charge. Joining

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Speaker 3: us to discuss the news is Zoe Tellman, Bloomberg News

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Speaker 3: legal reporter, and Bloomberg's Kaylee Lines on the phone with

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Speaker 3: us from DC. Kaylee, I want to start off with you.

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Speaker 3: Just walk me through what we know about this deal

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Speaker 3: for Hunter Biden.

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Speaker 4: Well, it was revealed in a filing by the district

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Speaker 4: attorney in Delaware earlier today that there is a deal

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Speaker 4: that has been struck with prosecutors. The Hunter Biden, the

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Speaker 4: President's son, is going to plead guilty, as you said,

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Speaker 4: to these two misdemeanor tax charges basically related to charges

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Speaker 4: that he didn't pay taxes on time, and in doing so,

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Speaker 4: will likely avoid prosecution on a gun related charge because

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Speaker 4: that is going to go to what they call a

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Speaker 4: diversion program. So as long as he complies with certain

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Speaker 4: conditions for a period of time, that will be dismissed.

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Speaker 4: In that charge in particular, is about lying about his

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Speaker 4: drug use when purchasing a handgun several years ago. So

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Speaker 4: that's what we know about the agreement. It seems likely

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Speaker 4: that he would avoid prison time under this deal. And

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Speaker 4: of course you aren't hearing much about the White House

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Speaker 4: response to it, other than a statement that was put

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Speaker 4: out by a spokesperson saying that the President and the

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Speaker 4: First Lady love their son and support him. You are

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Speaker 4: hearing a lot though, on the other side of the aisle,

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Speaker 4: with Republicans like House Speaker Kevin McCarthy calling it a

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Speaker 4: sweetheart deal, as has the Oversight Committee chairman in the House,

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Speaker 4: Congressman James Comer, talking about a sweetheart deal and saying

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Speaker 4: that Congress is going to continue to pursue his own

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Speaker 4: investigation into Hunter Biden and the Biden family's dealings.

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Speaker 3: And we'll talk a little bit more, Kayley, about the

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Speaker 3: political ramifications here, but I want to go to you, Zoe,

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Speaker 3: talk to me in terms of the legal context here.

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Speaker 3: I guess, how weird is it for defendants who enter

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Speaker 3: into these agreements to plead guilty. Did that seem abnormal

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Speaker 3: to you?

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Speaker 5: No?

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Speaker 6: I mean, if a defend and is willing to accept

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Speaker 6: responsibility for the crimes that they're under investigation for, the

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Speaker 6: government is certainly open to entering into agreements, they have

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Speaker 6: discretion to also you know, sign off on you know,

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Speaker 6: these diversion programs, especially for first time offenders. There are

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Speaker 6: certain types of crimes that aren't eligible, but the offense

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Speaker 6: that Hunter Biden has been charged with, this gun offense,

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Speaker 6: doesn't fall under that category. So the idea is by

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Speaker 6: admitting responsibility but not pleading guilty, if he can stay

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Speaker 6: you know, drug free, not possess any guns, you know,

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Speaker 6: not commit other crimes, comply with other conditions. After a

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Speaker 6: period of time, the government agrees it's not going to

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Speaker 6: prosecute that particular offense. And we've been told, although it's

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Speaker 6: not public yet, that the plea deal on the tax

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Speaker 6: crimes will include a recommendation from prosecutors of twenty four

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Speaker 6: months of probation, so he seems to be in a

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Speaker 6: situation where he will not serve any jail time. Of course,

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Speaker 6: it's up to the judge. Those tax crimes, although they're misdemeanors,

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Speaker 6: they do carry up to a year in prison, so

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Speaker 6: the judge could decide to not abide by that probation recommendation.

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Speaker 6: But they're going to give it a lot of weight. So,

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Speaker 6: you know, it seems like legally he is coming out

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Speaker 6: of this with not so much exposure, you know, publicly

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Speaker 6: pr wise, politically it's a different story.

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Speaker 3: So Kaylee, come back in here. I'm curious what's next

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Speaker 3: for Hunter Biden because there's also the laptop situation that

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Speaker 3: you mentioned earlier as well. What would be next for

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Speaker 3: him and what else is there for us to kind

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Speaker 3: of learn and figure out still that we might get

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Speaker 3: more information about in the coming weeks.

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Speaker 4: Well, of course, what's next for him in this case

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Speaker 4: is he's going to have to go to the federal

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Speaker 4: court in Delaware and actually enter this police so we

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Speaker 4: will have to see him appear there, and then, as

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Speaker 4: Zoe was alluding to, the judge is going to have

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Speaker 4: to make some decisions about how all of this is

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Speaker 4: going down. But I would say there also could potentially

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Speaker 4: be more coming down the pike for him. Here in Washington,

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Speaker 4: I mentioned Congressman James Comer, who heads up the Oversight Committee,

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Speaker 4: already had ongoing investigations into Hunter Biden, into the wider

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Speaker 4: Biden family, and he really doubled down today, committed to

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Speaker 4: continuing that effort despite what we're seeing come out of

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Speaker 4: the Justice Department today, that those efforts are going to continue.

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Speaker 4: So this is not to say that by inking this

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Speaker 4: deal with prosecutors Hunter Biden has now removed all of

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Speaker 4: his potential legal or investigative woes that he was facing.

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Speaker 4: If anything, this may just add more fuel to the

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Speaker 4: fire for Republicans to really double down.

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Speaker 3: On those efforts.

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Speaker 4: And this is something that his father, President Joe Biden,

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Speaker 4: is going to have to contend with on the campaign

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Speaker 4: trail you mentioned, Maddie. He's out in California trying to

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Speaker 4: raise money for his campaign, meeting with donors, and this

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Speaker 4: is definitely just a very difficult issue for him to navigate,

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Speaker 4: as he doesn't want to appear that he has the

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Speaker 4: thumb on the scale at the Justice Department in any

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Speaker 4: way on his side case or of course, in the

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Speaker 4: case the Justice Department has brought against his likely opponent

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Speaker 4: in the twenty twenty four general election, former President Donald Trump.

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Speaker 4: We have to consider that factor here as well.

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Speaker 3: And Kelly's sticking with you on that for a second.

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Speaker 3: Have we heard yet how the Biden camp is going

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Speaker 3: to strategize to kind of distance themselves from the Republican

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Speaker 3: narrative of Biden having his finger on the Justice Department.

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Speaker 4: Really by not commenting they will not engage in conversation

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Speaker 4: around this, whether you're talking about, you know, the White

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Speaker 4: House Press Secretary saying no comment, or the President himself

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Speaker 4: saying he's not going to comment on it. They are

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Speaker 4: really trying to stay at arm's length, likely to avoid

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Speaker 4: that perception that this is in the case against former

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Speaker 4: President Donald Trump politically motivated, or that you know, the

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Speaker 4: president is trying to protect his son from the workings

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Speaker 4: of the Justice Department. So I think really the strategy

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Speaker 4: is to not engage with it much at all, to

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Speaker 4: let the prosecutors and the Department of Justice do its work,

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Speaker 4: and for the president and the Biden campaign to stay

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Speaker 4: far away from that.

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Speaker 3: Yeah, definitely a very different strategy from what we continue

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Speaker 3: to see from former President Trump. Zoe, talk to me

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Speaker 3: about this trial date August fourteenth, walk me through the

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Speaker 3: timeline on that. Did that feel kind of speedy to you?

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Speaker 6: It's very speedy, and I should say not surprisingly so.

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Speaker 6: The South Florida District Court has been known historically as

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Speaker 6: a rocket docket. You know, cases that get brought there

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Speaker 6: move to trial fast.

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Speaker 7: There.

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Speaker 6: That said, you know, our understanding is that this order

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Speaker 6: is standard process for the court, but we haven't seen

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Speaker 6: any motions from the defense yet and we're expecting some,

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Speaker 6: if not, you know, quite a few from them, challenging

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Speaker 6: the validity of the indictment, contesting evidence that the government

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Speaker 6: wants to use, possible issues related to how classified information

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Speaker 6: gets used in a future trial, and all of these

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Speaker 6: are issues that are going to take weeks or months

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Speaker 6: to litigate. So it's unlikely that August fourteenth remains the

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Speaker 6: trial date, but it is certainly the judge, you know,

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Speaker 6: at least putting down an anchor and making clear that

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Speaker 6: she would like to move this along as quickly as possible.

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Speaker 3: And what do we know, Zoe about the jury here

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Speaker 3: is this This is going to be in Palm Beach

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Speaker 3: County now correct.

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Speaker 6: We're still waiting to see where the trial will take place.

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Speaker 6: The judge's order had said it would actually be in

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Speaker 6: her home district of Fort Pierce, Florida, and not in

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Speaker 6: West Palm Beach. There are some process quirks in that

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Speaker 6: district where cases that are filed in West Palm Beach

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Speaker 6: can actually go to judges who sit in adjacent districts. So,

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Speaker 6: you know, but either way, whether it's in Fort Pierce

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Speaker 6: or West Palm Beach, Florida, you know, is a state

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Speaker 6: that went for Trump in twenty twenty. You know, it

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Speaker 6: is a red state, and the pool of potential jurors

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Speaker 6: is likely going to include, you know, more people who

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Speaker 6: voted for Donald Trump than say, if the trial were

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Speaker 6: here in Washington. So you know, we don't know what

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Speaker 6: that pool will look like. And you know, certainly jury's

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Speaker 6: election is meant to screen people not necessarily have an opinion,

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Speaker 6: but who feel that their minds are made up and

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Speaker 6: they can't look at the evidence objectively, you know. And

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Speaker 6: that may mean that some of the former president's political

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Speaker 6: supporters are on the jury, but that certainly doesn't mean

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Speaker 6: it's a you know, stacked deck at this point either way.

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Speaker 3: Well, Kayleie, talk to me about the politics here. That

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Speaker 3: August fourteenth date comes just ahead of a pretty important

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Speaker 3: event when it comes to the twenty twenty four election.

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Speaker 3: Talk to me about that.

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Speaker 4: Well, it does. This trial would last for two weeks,

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Speaker 4: which would mean it would still be ongoing on August

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Speaker 4: twenty third, when the first Republican primary debate is scheduled

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Speaker 4: to happen in Milwaukee. Granted, former President Trump hasn't actually

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Speaker 4: committed to be at that debate either way, but clearly

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Speaker 4: that would put this front and center on the topic

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Speaker 4: for discussion for his opponents in the primary to really

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Speaker 4: attack him on potentially, So there's that consideration. Also, we

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Speaker 4: have to keep in mind that for months now we

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Speaker 4: have expected August could the month where a potential indictment

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Speaker 4: comes down in Georgia in Fulton County, where the district

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Speaker 4: attorney there is looking into president former President Trump's efforts

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Speaker 4: to overturn the results of the twenty twenty election in

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Speaker 4: that state. So August could be a very politically legally

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Speaker 4: briefe month for the former president. Again, assuming that this

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Speaker 4: trial actually happens two months from now, which Zoe was

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Speaker 4: just outlining, there's a very real chance that it does not.

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Speaker 3: Kaylee, final thirty seconds here, what's going to be your

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Speaker 3: big question heading into that debate? What do you think

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Speaker 3: is going to be like the headline the next day?

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Speaker 4: Well, I want to know who's going to get on

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Speaker 4: the stage first of all, because you need to have

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Speaker 4: a certain number of donations and people signed on to

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Speaker 4: support you. And now that we're over a dozen Republican

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Speaker 4: primary candidates, is the stage going to be big enough?

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Speaker 4: Are we going to have to have, you know, two

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Speaker 4: debates at once, and then of course, how do they

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Speaker 4: approach the Trump question, whether or not they would pardon him,

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Speaker 4: what they think about his actions. Those have been very

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Speaker 4: difficult questions for these other candidates to navigate.

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Speaker 3: Well, we're going to have you here with us to

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Speaker 3: cover all of it. Kaylee, thank you so much. That

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Speaker 3: was Kelly Lions and Zoe Tilman down in DC with us.

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Speaker 3: You're listening to Bloomberg Law. I'm Madison Mills and this

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Speaker 3: is Bloomberg.

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Speaker 1: This is Bloomberg Law with June Grasso from Bloomberg Radio.

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Speaker 3: I'm Madison Mills in for June Grasso, and this is

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Speaker 3: Bloomberg Law. The AI craze it's not just hitting markets,

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Speaker 3: it's also definitely been hitting Washington and President Joe Biden

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Speaker 3: is scheduled to meet with business leaders and experts on

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Speaker 3: artificial intelligence today. This is part of a broader shift

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Speaker 3: from his administration and a move from his administration pushing

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Speaker 3: for news security and privacy safeguards surrounding AI. So joining

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Speaker 3: us to discuss is Jackie Davilos, Bloomberg News technology reporter.

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Speaker 3: We've also got Courtney Rosen, our White House reporter from

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Speaker 3: Bloomberg Government on the line. From DC. Thank you both

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Speaker 3: so much for being here at Courtney, I want to

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Speaker 3: start with you, what do we know about this meeting

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Speaker 3: and what can we expel back to the big headlines

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Speaker 3: to come out of it?

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Speaker 8: To be President Biden is in California this week otherwise

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Speaker 8: for political fundraisers, but on the way he's having a

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Speaker 8: meeting today with AI experts and leaders. And what's a

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Speaker 8: little different about this meeting compared to others he's done

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Speaker 8: in the past is today he's talking to researchers, he's

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Speaker 8: talking to advocates. In the past, he's met with tech

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Speaker 8: industry CEOs, so he's definitely getting a different perspective here

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Speaker 8: on his trip to California that he got from a

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Speaker 8: meeting at the White House several weeks ago on the topic.

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Speaker 8: His Chief of Staff, Jeff Zience, is leading the White

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Speaker 8: House's effort to respond to AI. And I would note

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Speaker 8: that mister Science was on the board of META right

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Speaker 8: before President Biden took office, so he definitely has experience

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Speaker 8: in the tech sector.

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Speaker 3: Corney, I want to go back to you, because you're

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Speaker 3: obviously in DC, you cover the White House. Do you

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Speaker 3: get a sense that this has always been a priority

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Speaker 3: for the Biden administration or is this kind of a

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Speaker 3: newer move for them to look into AI.

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Speaker 8: It's definitely new. I didn't hear them up until a

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Speaker 8: couple months ago talking about AI and press briefings or

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Speaker 8: in speeches. When it really became a topic was when

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Speaker 8: chat GPT became public where people could test it out,

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Speaker 8: and Congress started talking about it, the White House started

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Speaker 8: talking about it, and that's when we really started to

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Speaker 8: see Washington zone in on AI.

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Speaker 3: Yeah, that makes a lot of sense. I wonder too,

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Speaker 3: what you think the regulators in Washington might be missing

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Speaker 3: when it comes to AI, because there is always that

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Speaker 3: kind of criticism that Washington doesn't necessarily keep up with

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Speaker 3: all of the technology booms that we experience. Do you

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Speaker 3: get a sense that that story is going to be

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Speaker 3: a little bit different when it comes to AI.

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Speaker 8: Senator Schumer, who's the Senate majority leader, is definitely trying

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Speaker 8: to create a different story here. He's scheduled tomorrow to

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Speaker 8: release his proposal on how to regulate AI, and today

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Speaker 8: he's having a meeting with senators to talk about what

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Speaker 8: the technology is, how it works, so they're educated on

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Speaker 8: what it is they're going to be writing a law

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Speaker 8: about or writing a bill about I should say, and.

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Speaker 3: I imagine a lot of the big tech players are

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Speaker 3: going to be key in that conversation. Jackie, I want

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Speaker 3: to come back to you. You were talking to me

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Speaker 3: earlier about how the big tech players and those big

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Speaker 3: names are also the big names that we're seeing push

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Speaker 3: into AI. Can you tell me a little more about that.

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Speaker 5: Absolutely, and you know, related to the wave of movement

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Speaker 5: coming from Capitol Hill, these big players have a lot

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Speaker 5: to do with the conversation that lawmakers are ultimately going

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Speaker 5: to push forward when it comes to raining in some

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Speaker 5: of this technology. We had spoken with representative from Virginia

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Speaker 5: Don Bayer for our show, and there was a lot

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Speaker 5: of excitement about the technology, but also an acknowledgment that

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Speaker 5: lawmakers don't really know where to begin. Today was interesting

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Speaker 5: and that the first bipart is a bill aimed at,

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Speaker 5: you know, creating some kind of guardrails around AI, was

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Speaker 5: released today and what it was pretty telling and that

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Speaker 5: you know, it wasn't that meaty when it came to

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Speaker 5: the specifics on how to create some guardrails. That's quite

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Speaker 5: a bit of a contrast when you think about how

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Speaker 5: far the European Union is in starting to enact pretty

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Speaker 5: specific rules when it comes to reigning in AI, some

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Speaker 5: of that being you know, banning facial recognition software for example,

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Speaker 5: something that wasn't explicitly called out in the bipartisan bill

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Speaker 5: proposed today. So just some differences there and just how

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Speaker 5: far ahead one region is from another. But here especially,

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Speaker 5: you know, the big tech players are going to have

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Speaker 5: a big say given lotmakers need some of that guidance.

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Speaker 3: Well, Jack, you asked such a great question to one

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Speaker 3: of your guests on the show. You were like, what

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Speaker 3: are the conversations at dinners in San Francisco about AI?

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Speaker 3: Talk to me about the answer you got on that.

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Speaker 5: Yeah, you know, there's a lot of excitement, but when

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Speaker 5: it comes to the dinner table of these venture capitalists

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Speaker 5: and the kinds of things that excite them, it's not

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Speaker 5: always you know, rooted in reality. Let's put it nicely.

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Speaker 5: There is just so much potential and a lot of optimism.

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Speaker 5: That's really I think the vibe that Silicon Valley always

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Speaker 5: has when introducing something new to the mainstream. But it

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Speaker 5: was interesting because for the first time I think in

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Speaker 5: a while, social media, for example, you know, the lawmakers

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Speaker 5: and companies industry, we're never really on the same page

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Speaker 5: when it comes to artificial intelligence. You're really seeing more

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Speaker 5: of a common tenor with the acknowledgment that, look, we

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Speaker 5: have something really exciting on our hands, but also, hey,

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Speaker 5: this also has so much more to go. But we

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Speaker 5: really need to start putting in the rules now much

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Speaker 5: more proactive, let's learn from our mistakes, and just hearing

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Speaker 5: that tone coming from both sides, I think is a

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Speaker 5: new shift for technology.

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Speaker 3: So Courtney, come back in here. I'm curious where things

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Speaker 3: stand when it comes to AI regulation from the congressional perspective. Here,

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Speaker 3: I guess what inning would you say that we're in.

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Speaker 3: Are we in the first inning of that regulation? Are

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Speaker 3: we down in the seventh?

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Speaker 8: Where are we at sports metaphors? Congress loves that. I

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Speaker 8: definitely say we're still toward the beginning of the game.

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Speaker 8: They beginning too. When open ais CEO was here a

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Speaker 8: couple of weeks ago talking about chat DBT, that was

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Speaker 8: definitely the beginning of Congress getting interested in this topic.

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Speaker 8: We saw a lot of headlines, we saw a lot

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Speaker 8: of questions come out of members, and now we're starting

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Speaker 8: to see them actually get to the work of drafting

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Speaker 8: a bill, and like Jackie was just saying, we're not

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Speaker 8: really sure what that'll look like. And it's the bill

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Speaker 8: so far that has been out is not very meaty,

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Speaker 8: so we'll see how that goes for sure. But Congress

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Speaker 8: does love a sports analogy.

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Speaker 3: They love a sports analogy, that is for sure. Jackie,

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Speaker 3: talk to me about what your sources are saying when

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Speaker 3: it comes to financing and how regulation might impact that.

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Speaker 3: Are you hearing anyone say, you know, I'm so worried

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Speaker 3: about the DC regulation story that I'm gonna hold my

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Speaker 3: money for a little while and wait and see.

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Speaker 5: Not so much. I think that, you know, the biggest players, Google, Microsoft,

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Speaker 5: the chip makers, the cloud providers, they've all done a

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Speaker 5: really good job at being proactive in engaging Capitol Hill

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Speaker 5: and getting a sense of, you know, what is the sentiment,

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Speaker 5: how can we shift that? And not in any nefarious way,

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Speaker 5: but in a much more proactive manner in working with lawmakers.

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Speaker 5: So everyone's somewhat on a similar page when it comes

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Speaker 5: But when it comes to you know, the more nimble

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Speaker 5: startups that don't have this like lobbying, funding and power

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Speaker 5: and political capital in Washington, they do rely a lot

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Speaker 5: on their you know, their biggest backers, whether it's the

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Speaker 5: big vcs or you know some of these companies Microsoft, like,

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Speaker 5: you know, they're backing Opening Opening, I obviously taking their

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Speaker 5: own presence on Capitol Hill, but there's many other AI

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Speaker 5: startups out there that have to rely on the vcs

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Speaker 5: and the companies to kind of push the conversation forward

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Speaker 5: for the industry on that front.

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Speaker 3: Yeah, Courtney, final thirty seconds here, what is the next

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Speaker 3: big thing when it comes to AI regulation? What should

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Speaker 3: we be looking.

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Speaker 8: Out for this summer? The White House Budget Office is

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Speaker 8: set to set standards on how AI will be used

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Speaker 8: in government. And we know that thousands, hundreds of thousands,

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Speaker 8: millions of people interact with the US government every year,

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Speaker 8: and how the US integrates AI into that experience is

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Speaker 8: going to be really telling about how the Biden administration,

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Speaker 8: how government sees AIM moving forward. So I would definitely

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Speaker 8: be watching that.

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Speaker 3: All right, Really good to know. Thank you so much,

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Speaker 3: Courtney Rosen, White House reporter for Bloomberg Government. And we

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Speaker 3: also Jackie Davilos, our Bloomberg News technology reporter. You're listening

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Speaker 3: to Bloomberg Law coming up on the show, How the

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Speaker 3: Justice Department is looking at bank mergers in a new way.

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Speaker 3: I'm Madison Mills. I'm in for June Grasso, and this

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Speaker 3: is Bloomberg.

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Speaker 1: This is Bloomberg Law with June Grasso from Bloomberg Radio.

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Speaker 3: I'm Madison Mills in for June Grasso this week. Remember

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Speaker 3: those four banks they failed a few months ago. Some

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Speaker 3: called it a banking crisis, others called a turmoil. There

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Speaker 3: is a lot of turmoil over how to describe it,

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Speaker 3: but either way, it led to some big questions at

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Speaker 3: the Justice Department, with officials now weighing a revamp over

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Speaker 3: how they scrutinize bank mergers. So joining us to discuss

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Speaker 3: is Leah Nylan and Bloomberg News Andy Trust, reporter down

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Speaker 3: in DC for us. Leah, thanks so much for being here.

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Speaker 3: What's up with the DJ here? So what's up with

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Speaker 3: the Justice Department? What are they saying about what the

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Speaker 3: new regulation could look like?

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Speaker 9: Yeah, So the Justice Department has a dual role with

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Speaker 9: banking authorities to review any bank mergers, and they look

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Speaker 9: at them just like they would any other deal, to

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Speaker 9: sort of see how the merger of a bank would

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Speaker 9: impact folks. But for the past thirty years, since about

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Speaker 9: nineteen ninety five, they've sort of limited the way that

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Speaker 9: they look at them to very specific things, focused on

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Speaker 9: how it would impact the concentration of deposits in specific areas.

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Speaker 9: And at a speech this morning, the head of the

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Speaker 9: Anti Trust Division, that's Assistant Attorney General for antitrust, Jonathan Kanter,

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Speaker 9: said that that approach is really too narrow. You know,

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Speaker 9: the banking economy. It's sorry. The banking industry is really

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Speaker 9: very different today than it was in nineteen ninety five,

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Speaker 9: and they need to be looking at a lot more

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Speaker 9: factors when they examine bank mergers. So they want to

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Speaker 9: look at things like, how does this bank merger impact

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Speaker 9: the sort of fees that consumers might end up paying,

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Speaker 9: how does it impact small business lending? All sorts of

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Speaker 9: things that really before they weren't actually paying that much

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Speaker 9: attention to.

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Speaker 3: So talk to me about what triggered this. Is it

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Speaker 3: the case that these most recent banking issues made the

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Speaker 3: Justice Department raise their eyebrows a little bit more, move

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Speaker 3: a little more quickly, or was this already kind of

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Speaker 3: in the works.

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Speaker 9: So the Justice Department actually started looking at doing a

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Speaker 9: revamp to the bank merger guidelines back in twenty twenty,

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Speaker 9: and then President Biden put in place this Executive Order

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Speaker 9: on Competition his first summer. This was around July of

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Speaker 9: twenty twenty one. That really encouraged a lot of the

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Speaker 9: agencies here in the federal government to consider how various

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Speaker 9: rules and regulations they had on the books impact competition.

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Speaker 9: So the Justice Department sort of used that to prod

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Speaker 9: some of the other banking agencies like the Federal Reserve,

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Speaker 9: the Federal Deposit Insurance Corporation, the one that helps with

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Speaker 9: failed banks, and the Office of the Control of the

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Speaker 9: Currency and other banking regulator who has oversight over bank

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Speaker 9: mergers to really sort of rethink the way that they

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Speaker 9: do bank mergers, and some of that, you know, has

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Speaker 9: had some impact here in DC. You know, one of

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Speaker 9: the things that the FED found when they were reviewing

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Speaker 9: the failure of Silicon Valley Bank was that they had

439
00:23:22,160 --> 00:23:25,640
Speaker 9: sort of waved through this merger in twenty twenty one

440
00:23:26,119 --> 00:23:29,399
Speaker 9: with another bank called Boston Private Financial Holdings. It was

441
00:23:29,440 --> 00:23:32,320
Speaker 9: actually a pretty big merger. It gave SVB another nine

442
00:23:32,400 --> 00:23:36,240
Speaker 9: hundred million dollars, and they said, Okay, we think that

443
00:23:36,320 --> 00:23:38,359
Speaker 9: this is fine. It's not going to impact the safety

444
00:23:38,400 --> 00:23:41,760
Speaker 9: of stability of the financial system. But they didn't actually

445
00:23:41,800 --> 00:23:45,200
Speaker 9: like check whether SBB had plans in place for how

446
00:23:45,200 --> 00:23:48,040
Speaker 9: it was going to like deal with becoming a much

447
00:23:48,119 --> 00:23:51,080
Speaker 9: larger bank. And they never actually checked with the people

448
00:23:51,240 --> 00:23:53,520
Speaker 9: at the FED whose job as bank supervision to make

449
00:23:53,520 --> 00:23:55,760
Speaker 9: sure that they had a plan for how they were

450
00:23:55,800 --> 00:23:59,080
Speaker 9: going to improve their supervision of this much larger bank.

451
00:23:59,600 --> 00:24:02,120
Speaker 9: So there has been a little bit of I guess,

452
00:24:02,119 --> 00:24:04,879
Speaker 9: second guessing whether maybe some of these mergers that they

453
00:24:04,920 --> 00:24:10,240
Speaker 9: approved recently they weren't really weren't ready for the big leagues,

454
00:24:10,680 --> 00:24:14,720
Speaker 9: and maybe the FAD wasn't really ready to actively supervise

455
00:24:14,800 --> 00:24:15,919
Speaker 9: them now that they're larger.

456
00:24:16,119 --> 00:24:18,159
Speaker 3: Right, sounds like they got to the end there and

457
00:24:18,200 --> 00:24:20,639
Speaker 3: then just had a couple of a couple of question

458
00:24:20,680 --> 00:24:25,040
Speaker 3: marks they were okay with leaving open. So so talk

459
00:24:25,119 --> 00:24:28,040
Speaker 3: to me, then, Leah, about what this means for the

460
00:24:28,119 --> 00:24:30,760
Speaker 3: regional banks. Like when we talk about an SVB, obviously

461
00:24:30,800 --> 00:24:37,159
Speaker 3: that's a bigger player. Here is the Justice Department concerned about,

462
00:24:37,560 --> 00:24:40,600
Speaker 3: you know, a merger or a partnership of a smaller

463
00:24:40,640 --> 00:24:42,439
Speaker 3: regional banks as well, or is it more about the

464
00:24:42,440 --> 00:24:44,600
Speaker 3: big guys chomping up the little er guys.

465
00:24:44,720 --> 00:24:47,080
Speaker 9: They were really emphasizing at the speech this morning that

466
00:24:47,119 --> 00:24:49,639
Speaker 9: they're not trying to prejudge any of the mergers. You know,

467
00:24:49,760 --> 00:24:52,840
Speaker 9: all merger investigations are very fact specific. They look at

468
00:24:52,880 --> 00:24:56,399
Speaker 9: how you know, it's going to impact the specific geographic

469
00:24:56,440 --> 00:25:01,000
Speaker 9: area and also you know, customers. But they did say,

470
00:25:01,040 --> 00:25:05,320
Speaker 9: you know, like big banks, obviously it's it's much more

471
00:25:05,320 --> 00:25:07,719
Speaker 9: of a problem for them, you know, to get bigger.

472
00:25:07,760 --> 00:25:09,679
Speaker 9: And they said that they are very cognizant of the

473
00:25:09,680 --> 00:25:12,199
Speaker 9: fact that we do now have a certain segment of

474
00:25:12,200 --> 00:25:13,840
Speaker 9: banks that are a little bit too big to fail.

475
00:25:13,920 --> 00:25:17,240
Speaker 9: That's a quote market reality that they can't just ignore.

476
00:25:17,680 --> 00:25:19,639
Speaker 9: But they also said that one of the things that

477
00:25:19,680 --> 00:25:23,640
Speaker 9: they were hoping this bank merger revamp might do is actually,

478
00:25:23,840 --> 00:25:26,040
Speaker 9: you know, maybe make it easier for the smaller guys.

479
00:25:26,359 --> 00:25:29,520
Speaker 9: You know, the focus on local deposit concentrations, which is

480
00:25:29,520 --> 00:25:32,720
Speaker 9: which is what they have been looking at since nineteen

481
00:25:32,800 --> 00:25:36,320
Speaker 9: ninety five, really does make it so that if you know,

482
00:25:36,480 --> 00:25:39,359
Speaker 9: a small bank in one area tries to merge with

483
00:25:39,400 --> 00:25:41,920
Speaker 9: another small bank, you know, it puts a lot of

484
00:25:41,960 --> 00:25:45,200
Speaker 9: focus on that because you know, of this the geographic

485
00:25:45,280 --> 00:25:48,000
Speaker 9: nature of it. So maybe maybe these small bank mergers

486
00:25:48,000 --> 00:25:49,800
Speaker 9: aren't that big a deal, and they need to be

487
00:25:49,840 --> 00:25:52,680
Speaker 9: considering some other factors, Like you know, people might not

488
00:25:52,960 --> 00:25:56,320
Speaker 9: always care as much now today about whether they have

489
00:25:56,400 --> 00:25:58,639
Speaker 9: a local branch, given that you can use the internet

490
00:25:58,680 --> 00:25:59,000
Speaker 9: to do.

491
00:25:58,920 --> 00:26:01,800
Speaker 3: A lot of your banking right right. And I wonder too,

492
00:26:01,840 --> 00:26:05,040
Speaker 3: when you talk about those smaller regional banks, to what

493
00:26:05,160 --> 00:26:10,359
Speaker 3: extent is the kind of layover impact of the Trump

494
00:26:10,400 --> 00:26:16,080
Speaker 3: administration's rollbag of some of that regulation leading to some

495
00:26:16,119 --> 00:26:18,560
Speaker 3: more partnership between these smaller banks. How big of a

496
00:26:18,600 --> 00:26:19,600
Speaker 3: factor is that.

497
00:26:19,600 --> 00:26:23,880
Speaker 9: That's definitely a big factor they you know, when they

498
00:26:24,000 --> 00:26:26,080
Speaker 9: rolled back some of those things, that made it easier

499
00:26:26,119 --> 00:26:30,080
Speaker 9: for these smaller banks to get together because it the

500
00:26:30,119 --> 00:26:33,720
Speaker 9: threshold for which they had greater supervision was higher. So

501
00:26:34,080 --> 00:26:37,399
Speaker 9: you could maybe get together with another small bank because

502
00:26:37,400 --> 00:26:39,800
Speaker 9: that's not going to push you over the limit. You

503
00:26:39,920 --> 00:26:41,639
Speaker 9: might not, you know, want to get together with a

504
00:26:41,640 --> 00:26:45,440
Speaker 9: medium sized bank, because I would. But so that really

505
00:26:45,440 --> 00:26:48,160
Speaker 9: did lead to a lot of mergers twenty twenty one.

506
00:26:48,280 --> 00:26:51,360
Speaker 9: I think I had a statistic in my story about

507
00:26:51,400 --> 00:26:53,359
Speaker 9: how twenty twenty one was like the biggest year on

508
00:26:53,440 --> 00:26:56,200
Speaker 9: record for bank mergers and something like a couple decades

509
00:26:56,840 --> 00:27:00,280
Speaker 9: in part because of this rollback on some of the

510
00:27:00,280 --> 00:27:04,960
Speaker 9: Dodd Frank regulations, and they're sort of expecting a lot

511
00:27:05,000 --> 00:27:07,240
Speaker 9: more bank mergers to come later this year. You know,

512
00:27:07,440 --> 00:27:10,119
Speaker 9: earlier this year it was really slow, in part because

513
00:27:10,480 --> 00:27:12,840
Speaker 9: of the banking crisis. But then there were a lot

514
00:27:12,880 --> 00:27:17,480
Speaker 9: of bank mergers announced in April, the month after sort

515
00:27:17,520 --> 00:27:21,879
Speaker 9: of a lot of the rockiness that had already it

516
00:27:21,960 --> 00:27:25,800
Speaker 9: started to shake out, So, you know, they there is

517
00:27:25,880 --> 00:27:28,240
Speaker 9: still a lot of prediction that some of these smaller

518
00:27:28,280 --> 00:27:32,679
Speaker 9: banks might want to merge, in part also because there

519
00:27:32,720 --> 00:27:36,560
Speaker 9: are a lot of modernization efforts underway at banks. You know,

520
00:27:36,640 --> 00:27:39,360
Speaker 9: like maybe you don't have that great a web app

521
00:27:39,400 --> 00:27:40,840
Speaker 9: and you sort of want to get one now that

522
00:27:40,880 --> 00:27:43,160
Speaker 9: a lot of people are doing like more online banking.

523
00:27:43,560 --> 00:27:46,760
Speaker 3: It's so interesting because as I've been filling in for June,

524
00:27:46,800 --> 00:27:50,000
Speaker 3: I've been talking with Jenry a lot about how hard

525
00:27:50,040 --> 00:27:53,680
Speaker 3: it's been for companies to deal with and get mergers

526
00:27:53,720 --> 00:27:56,560
Speaker 3: and acquisitions through with the current Justice Department. But it

527
00:27:56,640 --> 00:27:59,680
Speaker 3: sounds like the opposite could be used to describe the

528
00:27:59,720 --> 00:28:01,520
Speaker 3: situation for banks more recently.

529
00:28:02,080 --> 00:28:05,720
Speaker 9: That's probably true. Actually, for a really long time, bank

530
00:28:05,760 --> 00:28:09,919
Speaker 9: mergers have sort of been waved through, and there was

531
00:28:10,040 --> 00:28:13,439
Speaker 9: one big banking deal earlier this year that collapsed. This

532
00:28:13,680 --> 00:28:19,520
Speaker 9: was the TD Bank First Horizon deal, and that one

533
00:28:19,920 --> 00:28:23,280
Speaker 9: they ended up calling off. Because the regulatory review was

534
00:28:23,320 --> 00:28:25,040
Speaker 9: just sort of going on for a very long time,

535
00:28:25,080 --> 00:28:29,480
Speaker 9: they didn't have much clarity about when it would end.

536
00:28:29,520 --> 00:28:33,919
Speaker 9: But one thing you know that they were really emphasizing

537
00:28:33,920 --> 00:28:36,520
Speaker 9: this morning is that you know, they are going to

538
00:28:36,560 --> 00:28:39,640
Speaker 9: try and get through, you know, the regulatory review as

539
00:28:39,760 --> 00:28:43,560
Speaker 9: quickly as possible, and you know, if there are problems,

540
00:28:43,600 --> 00:28:46,800
Speaker 9: they'll they'll make that clear. They have this thing the

541
00:28:46,920 --> 00:28:49,800
Speaker 9: Justice Department does called a Competitive Factors Report, in which

542
00:28:49,840 --> 00:28:52,200
Speaker 9: they will go through all of the ways in which

543
00:28:52,240 --> 00:28:54,880
Speaker 9: the two companies that are proposing to merge in this case,

544
00:28:54,920 --> 00:28:59,000
Speaker 9: banks compete, and you know, it'll make it clear, you know,

545
00:28:59,160 --> 00:29:03,000
Speaker 9: to the regular whether there is you know, a proposal

546
00:29:03,640 --> 00:29:05,719
Speaker 9: that might allow this to go through, or whether they

547
00:29:05,720 --> 00:29:08,320
Speaker 9: think it's something that should be blocked. But the Justice

548
00:29:08,320 --> 00:29:10,360
Speaker 9: Department did say, you know, they do have an independent

549
00:29:10,400 --> 00:29:14,480
Speaker 9: authority to block deals. The speech actually happened on the

550
00:29:14,960 --> 00:29:19,720
Speaker 9: sixtieth anniversary of this very famous bank merger case Philadelphia

551
00:29:19,760 --> 00:29:23,600
Speaker 9: National Bank, that really established that the Anti Trust Division

552
00:29:23,600 --> 00:29:25,840
Speaker 9: at the Justice Department has the authority to please bank

553
00:29:25,880 --> 00:29:29,520
Speaker 9: mergers just as the banking authorities do really interesting.

554
00:29:29,600 --> 00:29:32,120
Speaker 3: Leah, thank you so much for coming on to talk

555
00:29:32,160 --> 00:29:34,520
Speaker 3: with us about this, and also for your reporting. That

556
00:29:34,600 --> 00:29:37,320
Speaker 3: was Leah Nylan, Bloomberg News anti trust reporter. You can

557
00:29:37,320 --> 00:29:40,280
Speaker 3: find Leah's story along with along with her colleague Katanga

558
00:29:40,360 --> 00:29:43,200
Speaker 3: Johnson on the Terminal and on Bloomberg dot Com on

559
00:29:43,320 --> 00:29:47,719
Speaker 3: bank mergers facing fresh anti trust heat at the Justice Department.

560
00:29:48,160 --> 00:29:50,440
Speaker 3: You're listening to Bloomberg Law coming up on the show.

561
00:29:50,600 --> 00:29:53,480
Speaker 3: It's Pride month and the Supreme Court may decide on

562
00:29:53,520 --> 00:29:56,400
Speaker 3: a case this month that could have big implications for

563
00:29:56,480 --> 00:30:00,560
Speaker 3: the LGBTQ community. We're going to discuss that next. I'm

564
00:30:00,600 --> 00:30:04,280
Speaker 3: Madison Mills in for June Grasso, and this is Bloomberg.

565
00:30:22,960 --> 00:30:27,760
Speaker 1: This is Bloomberg Law with June Grasso from Bloomberg Radio.

566
00:30:29,320 --> 00:30:31,960
Speaker 3: This is Bloomberg Law. I'm Madison Mills in for June

567
00:30:32,040 --> 00:30:35,360
Speaker 3: Grasso this week and this is Pride month, and this

568
00:30:35,440 --> 00:30:37,520
Speaker 3: Pride Month of the US Supreme Court is set to

569
00:30:37,600 --> 00:30:40,760
Speaker 3: decide on a First Amendment case that could have huge

570
00:30:40,840 --> 00:30:45,040
Speaker 3: implications for the LGBTQ plus community. So joining us to

571
00:30:45,160 --> 00:30:48,840
Speaker 3: discuss that case is Greg Store, our Supreme Court reporter

572
00:30:49,000 --> 00:30:51,880
Speaker 3: and expert down in DC for us. Greg, thanks so

573
00:30:51,960 --> 00:30:54,600
Speaker 3: much for hopping on the phone with us here. Talk

574
00:30:54,680 --> 00:30:58,080
Speaker 3: me through the details. What is this case involving a

575
00:30:58,320 --> 00:30:59,480
Speaker 3: Colorado web designer.

576
00:31:00,240 --> 00:31:03,000
Speaker 7: Sure, she is a web designer who says she wants

577
00:31:03,040 --> 00:31:06,840
Speaker 7: to start making pages for weddings, but she says, because

578
00:31:06,840 --> 00:31:08,960
Speaker 7: of her religious beliefs, she only wants to make them

579
00:31:09,000 --> 00:31:12,760
Speaker 7: for opposite sex weddings. Now, Colorado is one of about

580
00:31:12,800 --> 00:31:15,600
Speaker 7: two dozen states that has a law that explicitly says

581
00:31:16,280 --> 00:31:19,800
Speaker 7: so called public accommodations cannot discriminate on the basis of

582
00:31:20,000 --> 00:31:23,840
Speaker 7: LGBTQ status. And so the question for the Supreme Court

583
00:31:23,880 --> 00:31:27,640
Speaker 7: in this case is whether there's essentially a First Amendment

584
00:31:27,840 --> 00:31:30,840
Speaker 7: carve out for that, whether her First Amendment rights her

585
00:31:30,840 --> 00:31:33,160
Speaker 7: free speech rights to create the kind of web pages

586
00:31:33,200 --> 00:31:35,040
Speaker 7: she wants to create and not though she doesn't want

587
00:31:35,080 --> 00:31:39,440
Speaker 7: to create, whether that essentially trumps the anti discrimination law.

588
00:31:40,040 --> 00:31:42,360
Speaker 3: Greg, obviously you're the expert here and not me, But

589
00:31:42,400 --> 00:31:44,760
Speaker 3: why do I feel like we've already done this before?

590
00:31:44,840 --> 00:31:46,320
Speaker 3: This feels really familiar to me.

591
00:31:47,160 --> 00:31:49,360
Speaker 7: Yeah, there was a very similar case a couple of

592
00:31:49,440 --> 00:31:53,600
Speaker 7: years ago involving a baker, also in Colorado who said

593
00:31:53,680 --> 00:31:56,240
Speaker 7: he didn't want to make a wedding cake to celebrate

594
00:31:56,280 --> 00:32:00,240
Speaker 7: a same sex marriage, and all these issues were front

595
00:32:00,240 --> 00:32:02,960
Speaker 7: and center in that case, but then the court kind

596
00:32:02,960 --> 00:32:05,760
Speaker 7: of sidestepped them. They decided it on very narrow ground,

597
00:32:06,240 --> 00:32:10,440
Speaker 7: really didn't do anything with that big tension between anti

598
00:32:10,440 --> 00:32:13,920
Speaker 7: discrimination principles on one hand and religious and speech rights

599
00:32:13,960 --> 00:32:14,600
Speaker 7: on the other hand.

600
00:32:15,200 --> 00:32:17,160
Speaker 3: So in this case it sounds like it's a little

601
00:32:17,200 --> 00:32:21,640
Speaker 3: bit more specifically about free speech. And if I'm writing

602
00:32:21,720 --> 00:32:24,920
Speaker 3: that description, what would you say, is the case that

603
00:32:25,040 --> 00:32:29,160
Speaker 3: feels like the biggest kind of precedent for informing the

604
00:32:29,160 --> 00:32:31,440
Speaker 3: court about what they might need to do in this case.

605
00:32:32,000 --> 00:32:35,160
Speaker 7: Yeah, it is a case that is just about speech.

606
00:32:35,880 --> 00:32:38,840
Speaker 7: The web designer Laurie Smith also had some religious rights arguments,

607
00:32:38,840 --> 00:32:40,720
Speaker 7: but the Court said we don't want to hear those

608
00:32:41,240 --> 00:32:45,480
Speaker 7: at least right now. You know, there are some precedents

609
00:32:45,560 --> 00:32:48,280
Speaker 7: that the Court has dealt with, for example, having to

610
00:32:48,320 --> 00:32:54,560
Speaker 7: do with a parade, whether a St. Patrick's Day parade

611
00:32:54,720 --> 00:33:01,880
Speaker 7: could be required to allow LGBTQ in the parade. There's

612
00:33:01,880 --> 00:33:07,360
Speaker 7: another case involving whether the Defense Department, where the universities

613
00:33:07,400 --> 00:33:09,680
Speaker 7: had to let the Defense Department come on the campus

614
00:33:09,720 --> 00:33:13,640
Speaker 7: to recruit just like other employers would, and the court

615
00:33:13,760 --> 00:33:17,680
Speaker 7: was grappling with some of those issues in during the arguments.

616
00:33:17,840 --> 00:33:20,160
Speaker 7: But this is also a very different court from the

617
00:33:20,160 --> 00:33:24,360
Speaker 7: ones that decided those cases. So you know, this may

618
00:33:24,360 --> 00:33:26,160
Speaker 7: be a court that puts itstone spin on things.

619
00:33:26,600 --> 00:33:32,000
Speaker 3: And any chance that the historic twenty fifteen case that

620
00:33:32,280 --> 00:33:36,920
Speaker 3: allows for same sex marriage to occur could be impacted

621
00:33:36,960 --> 00:33:38,480
Speaker 3: based on this decision.

622
00:33:38,160 --> 00:33:43,200
Speaker 7: Or no, not directly that case Obergerfell versus Hodges, which

623
00:33:43,240 --> 00:33:47,000
Speaker 7: says it is a constitutional right that same sex couples

624
00:33:47,040 --> 00:33:49,480
Speaker 7: do have a right to get married. That's not being

625
00:33:49,600 --> 00:33:53,600
Speaker 7: challenged here. Certainly, supporters of that decision would say it's

626
00:33:53,640 --> 00:33:58,000
Speaker 7: being watered down if if suddenly a same sex couple,

627
00:33:58,440 --> 00:34:01,320
Speaker 7: the married couple doesn't have the rights in a particular

628
00:34:01,360 --> 00:34:05,080
Speaker 7: state or nationwide that an opposite sex couple has. But

629
00:34:05,120 --> 00:34:08,120
Speaker 7: in terms of directly affecting that ruling, no, not in

630
00:34:08,160 --> 00:34:08,600
Speaker 7: this case.

631
00:34:09,160 --> 00:34:12,320
Speaker 3: So what's the timeline then, in our final thirty seconds

632
00:34:12,360 --> 00:34:15,759
Speaker 3: for this latest Colorado case in the Supreme Court.

633
00:34:15,560 --> 00:34:18,560
Speaker 7: Well, the court is scheduled to end its term by

634
00:34:18,600 --> 00:34:21,000
Speaker 7: the end of next week, so we're talking we talk

635
00:34:21,040 --> 00:34:23,040
Speaker 7: again a week from week from now, or a week

636
00:34:23,080 --> 00:34:24,600
Speaker 7: and a half from now, we should know the answer.

637
00:34:24,920 --> 00:34:28,120
Speaker 3: And do they always do what they say? How often

638
00:34:28,200 --> 00:34:29,759
Speaker 3: is the schedule right on time?

639
00:34:30,840 --> 00:34:34,200
Speaker 7: It is virtually always on time. The only exception really

640
00:34:34,280 --> 00:34:36,279
Speaker 7: was during the pandemic year, where there was a lot

641
00:34:36,280 --> 00:34:39,200
Speaker 7: of different different situations. So I would expect a ruling

642
00:34:39,239 --> 00:34:40,160
Speaker 7: by the end of next week.

643
00:34:40,600 --> 00:34:43,280
Speaker 3: All right, Greg Store, thank you so much for joining

644
00:34:43,320 --> 00:34:46,080
Speaker 3: on this joining us on this story. We're definitely going

645
00:34:46,120 --> 00:34:48,799
Speaker 3: to be talking with you again next week to get

646
00:34:48,840 --> 00:34:52,319
Speaker 3: more details on that case. For now, this is Bloomberg Law.

647
00:34:52,400 --> 00:34:55,640
Speaker 3: I'm Madison Mills. I've been in for June Grasso this week.

648
00:34:55,920 --> 00:34:58,480
Speaker 3: Stick with us. Subscribe to us at Bloomberg Law for

649
00:34:58,560 --> 00:35:00,680
Speaker 3: more news that you need from the Supreme Court to

650
00:35:00,719 --> 00:35:03,440
Speaker 3: everywhere else in the US. This is Bloomberg