Business
Michael Barr to Leave His Role as Fed Vice Chair for Supervision
Michael Barr will step down from his role as the Federal Reserve’s vice chair for supervision by Feb. 28, or sooner if President-elect Donald J. Trump appoints a successor, the Fed said on Monday.
Mr. Barr will continue to serve on the central bank’s Board of Governors. But in an interview, Mr. Barr said the decision to leave his role as vice chair of supervision was intended to sidestep a protracted legal battle with Mr. Trump that he believed could damage the central bank.
Some individuals attached to the Trump administration wanted to fire Mr. Barr before his term as vice chair expired, according to people familiar with the matter who spoke on background because of the sensitivity of the issue.
That could have resulted in a lengthy — and costly — legal fight over whether an incoming president has the authority to remove someone from a Senate-confirmed position at an independent agency.
Some financial regulatory experts questioned why Mr. Barr — and the Fed itself — would allow a political change to influence who served in a powerful role. Jerome H. Powell, the Fed’s chair, has made a point of saying that the Fed is independent of the White House and that its decisions are not influenced by politics. Mr. Powell has also insisted that Mr. Trump lacks the legal authority to fire him from his role as Fed chair, which is also confirmed by the Senate.
“I’m surprised by Barr’s announcement, because I expected him to resist Republican calls for his ouster and make a point of defending the Fed’s independence,” Ian Katz, managing director at Capital Alpha, said in an email.
Mr. Barr said he and his lawyers believed that he would prevail in court if Mr. Trump were to try and remove him. But he concluded that the fight wasn’t worth waging because of the harm it could inflict on the Fed.
“If it came to litigation on the merits, I would win,” Mr. Barr said. The bigger question, he said, was, “Do I want to spend the next couple of years fighting about that and is that good for the Fed? And what I decided was that no, it’s not good for the Fed, it would be a serious distraction from our ability to serve our mission.”
Mr. Barr said the decision was not easy. “The question I wrestled with is a tough question, and in many ways it was a painful decision.”
His departure will effectively freeze any bank regulatory actions until Mr. Trump names someone to the vice chairman role. In announcing his move, the central bank said: “The Board does not intend to take up any major rulemakings until a vice chair for supervision successor is confirmed.”
The combination of Mr. Barr’s decision to step down, combined with the moratorium, struck some financial regulatory experts as especially problematic.
“The Fed historically, zealously guards its independence,” Aaron Klein, the Miriam K. Carliner chair and senior fellow in economic studies at the Brookings Institution. “I find it strange that the Fed would not only tacitly seem to support this decision by Barr, but go further and announce a moratorium on rule making.”
Mr. Klein noted that if Mr. Trump opted not to pick anyone for a year or more, it could effectively chill bank rule making indefinitely.
Dennis Kelleher, the president, chief executive and co-founder of Better Markets, a nonprofit that pushes for tougher financial regulation, called Mr. Barr’s decision “shocking” and said it would hinder the Fed’s role in overseeing the safety and soundness of the financial system.
“His baseless capitulation to deregulation zealots will, in fact, destroy that mission quicker and more thoroughly than any dispute over the position,” he said.
Mr. Barr’s move comes after a tumultuous tenure overseeing regulation and supervision of the nation’s largest banks. Mr. Barr oversaw an attempt to rewrite financial rules that would have increased the amount of money that banks must have at the ready.
The overhaul would have required the largest banks to increase their cushion of capital — cash and other easily accessible assets that could be used to absorb losses — which Mr. Barr said would ensure banks could withstand periods of severe turmoil.
The proposal — and Mr. Barr — immediately came under attack from a wide variety of groups, including the banking industry, lawmakers and even some of his colleagues at the Fed. Two of the Fed’s seven governors, both Trump appointees, voted against the rules.
Mr. Barr ultimately watered down the proposal in September after acknowledging the blowback.
“Life gives you ample opportunity to learn and relearn the lesson of humility,” Mr. Barr said at an event that month.
While Mr. Trump has not announced any plans to try to replace Mr. Barr, the president-elect has made clear he plans to take an industry-friendly stance toward banks, echoing his administration’s approach during his first term. Mr. Trump’s vice chair of supervision, Randal K. Quarles, worked to loosen bank supervision during his tenure.
Even before Mr. Barr announced his decision to leave, there was widespread speculation that the bank proposal, known as Basel III endgame, would not gain final approval in a Trump administration.
The changes must be jointly agreed upon by the Fed, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. Mr. Trump has the opportunity to nominate the directors of the F.D.I.C. and O.C.C., though he has not yet said whom he plans to name.
Senator Tim Scott, the South Carolina Republican who will head the powerful Senate Banking Committee, welcomed Mr. Barr’s decision to step down, citing the blowup of Silicon Valley Bank and other regional firms in the spring of 2023 as well as the Basel III rules.
“From his supervisory failures during the spring 2023 bank failures to the disastrous Basel III endgame proposal — Michael Barr has failed to meet the responsibilities of his position,” Mr. Scott said in a statement. “I stand ready to work with President Trump to ensure we have responsible financial regulators at the helm.”
Business
Amazon’s Zoox offers free robotaxi rides in San Francisco
Amazon-owned Zoox is offering free rides on its San Francisco fleet of boxy, driverless taxis.
The company said Tuesday it is providing the rides to people who download the Zoox app and join a waitlist. The sneak peek is part of a program in which riders provide feedback about the robotaxis before they become more widely available.
The preview shows that Zoox is moving closer to expanding its robotaxi service in San Francisco, a city filled with hundreds of self-driving cars from major rival Waymo. Zoox’s robotaxi service will be available in the SoMa, Mission and Design District neighborhoods.
“We have seen incredible interest in Zoox in this market and are excited about this first step to bring our purpose-built robotaxi experience to more people,” Aicha Evans, Zoox’s chief executive, said in a statement.
Headquartered in Foster City, Calif., the company has been testing autonomous technology in San Francisco since 2017. Zoox employees have been trying out the robotaxis, but this will be the first time the rides will be available to the general public in America’s tech capital. The company hasn’t said when it plans to start charging for its robotaxi service in San Francisco.
The robotaxi race has been ramping up in California, a hotbed for testing autonomous vehicles. Waymo, owned by Google parent company Alphabet, rolled out its service to highways and Bay Area airports. Ride-hailing company Uber teamed with Lucid Group and Nuro to launch robotaxis in the San Francisco Bay Area next year. Tesla said it would start testing robotaxis with drivers in the Bay Area.
Zoox’s boxy, aloe green vehicle, described by some people as a “toaster on wheels,” looks different from its rivals. Designed to fit four people, the electric vehicles don’t have a steering wheel or pedals and the doors slide open and closed. While people face each other during the ride, some who have tested the vehicles reported feeling motion sickness from moving backward. The robotaxis include wireless charging, an emergency call button and a touchscreen to control the music and the vehicle’s temperature.
The company has a fleet of about 50 robotaxis across San Francisco and Las Vegas. In September the company started allowing the public to hail its robotaxi service around the Las Vegas Strip. Zoox opened a massive facility in Hayward, Calif., and said it will be able to assemble more than 10,000 robotaxis a year as demand for its services grows.
People are using self-driving vehicles more, but robotaxis also have ignited concerns about job loss, safety and privacy. Santa Monica residents have complained about the beeping noises from Waymos. In San Francisco and Los Angeles, people have vandalized the cars and set them on fire. And after a Waymo ran over KitKat, a beloved cat, San Francisco residents have expressed more safety concerns about self-driving taxis.
Some companies have failed to launch robotaxis. Last year automaker General Motors shuttered the development of its Cruise robotaxis, citing high costs and increased competition. Cruise lost the permits it needed to continue testing in California because of public safety risks after a woman was dragged underneath one of its robotaxis in San Francisco.
Zoox issued voluntary software recalls to address potential safety concerns. In May an electric scooter rider in San Francisco sustained minor injuries after the person struck an unoccupied Zoox vehicle that braked at an intersection. When the rider fell next to the robotaxi, it began to move but then stopped. The company said in a blog post it updated its software to improve how it tracks nearby pedestrians and prevent movement when a person is very close to the vehicle.
The amount of time it will take to get off the waitlist in San Francisco will depend on demand and the availability of its robotaxis. Zoox said there isn’t a limit to how many people can join the waitlist, but it aims to remove it next year.
The company also partnered with Tartine Manufactory, a popular bakery in San Francisco that’s well-known for its bread and pastries. Zoox posted on social media that people who download its app and sign up for the waitlist from Nov. 15 to 22 will be able to get a free pastry while supplies last.
Zoox has been testing its robotaxis in other major cities, including Los Angeles, Seattle, Austin and Miami. Tech giant Amazon bought Zoox in 2020 for more than $1.2 billion.
Business
Sinclair pursues a deal with Scripps to spark more TV station consolidation
Television station owner Sinclair Inc. has taken an equity stake in fellow broadcaster E.W. Scripps, signaling its intent to become a behemoth in the shrinking field.
Sinclair disclosed its interest in Scripps, which owns stations in Fresno, Bakersfield, Buffalo, N.Y., and Billings, Mont., in a Securities & Exchange Commission filing Monday. Baltimore-based Sinclair, known for its conservative political bent, said it has acquired about 8% of Scripps’ equity by buying some of its publicly traded shares.
Sinclair disclosed that it has had “constructive discussions with [Scripps] for several months regarding a potential combination of the two companies.”
No deal has been reached.
Cincinnati-based Scripps, in a statement, suggested that it wasn’t interested in a tie-up with Sinclair, saying the Scripps board and management instead were “focused on driving value for all of the company’s shareholders through the continued execution of its strategic plan.”
“The board and management are aligned on doing only what is in the best interest of all of the company’s shareholders as well as its employees and the many communities and audiences it serves across the United States,” Scripps said.
Sinclair appears to be putting pressure on Scripps by making the stock purchases and the public disclosure. Scripps stock jumped 40% to $4.28 at the market close on Monday. The company is valued at about $363 million.
Sinclair shares also got a bounce, gaining 5% and closing at $16.87. The company’s market value is $1.2 billion.
Television station owners are hoping that President Trump and his appointments to the Federal Communications Commission will lift the government-imposed cap on broadcast ownership. Currently, stations are restricted from owning outlets that reach more than 39% of the U.S. population.
Sinclair currently owns or operates 185 television stations in 85 markets, according to its website.
FCC Chairman Brendan Carr has signaled a willingness to undertake a massive deregulation. The anticipated push has prompted a flurry of deals among broadcasters, who have seen their advertisers scatter and audiences decline as more consumers get their news through social media.
Sinclair, in its filing, made a nod to the changing political winds in Washington.
“Recent industry consolidation and intensifying competition reinforce [Sinclair’s] view that further scale in the broadcast television industry is essential to address secular headwinds and compete effectively with larger-scale big-tech and big-media players, as well as major broadcast groups,” Sinclair wrote.
In September, Sinclair prodded the Walt Disney Co. to punish late night host Jimmy Kimmel after the host made comments about the alleged gunman who was later arrested and charged with the murder of conservative activist Charlie Kirk in Utah. Sinclair owns several ABC affiliate stations and dropped “Jimmy Kimmel Live!” for more than a week.
Sinclair demanded that Kimmel make a “meaningful personal donation” to Kirk’s political organization, Turning Point USA.
But Sinclair’s campaign crumbled after Disney’s brass returned Kimmel to his late night perch — without making concessions that Sinclair had demanded.
Critics have pointed to the alleged harms of TV station consolidation, including fewer on-the-ground workers and journalists reporting on the communities where the stations are based.
Sinclair’s filing contradicted such arguments, writing that “greater scale will also strengthen broadcasters’ ability to sustain their vital public service role in producing local news.”
The filing said consolidating Scripps could produce “more than $300 million in expected annual synergies.”
“The proposed combination would be structured to require no external financing as the combined company would maintain each company’s respective debt and preferred capital structures,” Sinclair wrote in the filing. “The transaction would avoid significant refinancing costs while meaningfully reducing leverage through the realization of synergies and lowering future refinancing risk.”
In its 2024 annual report, Sinclair said its dozens of stations produced “more than 2,400 hours of live news coverage per week across its station footprint, in addition to our various digital, social and audio platforms.”
Sinclair said in Monday’s filing that it was “committed to constructive engagement with [Scripps] toward reaching a definitive transaction agreement,” and Sinclair would like to consolidate its fellow broadcaster “within nine to 12 months.”
Scripps took a defensive stance in response to Sinclair’s overture, saying in a statement that “the board will take all steps appropriate to protect the company and the company’s shareholders from the opportunistic actions of Sinclair or anyone else.”
Elsewhere in the local TV business, Texas-based Nexstar, the nation’s largest TV broadcaster, is seeking government approval for its $6-billion deal to buy rival broadcaster Tegna.
Business
Fire survivors can use this new portal to rebuild faster and save money
People who lost homes in the Palisades and Eaton fires can now go online to pick vetted residential templates that could save them money and be ready as early as next year.
Builders Alliance, a nonprofit organization formed in response to the fires, on Friday launched a portal that offers survivors a selection of homes, filtered by lot size, price range and other preferences.
“We’re trying to create an ‘easy’ button for homeowners,” said Lew Horne, the chairman of Project Recovery, a group of academics and real estate industry experts who had created a road map for recovery.
Construction crews work on rebuilding a home and properties after the federal cleanup in Altadena on Sept. 10.
(Allen J. Schaben / Los Angeles Times)
Project Recovery’s March report — which was compiled by professors in the real estate graduate schools at USC and UCLA, along with the Los Angeles chapter of the Urban Land Institute, a real estate nonprofit education and research institute — said an alliance of builders could work together for economies of scale to speed up reconstruction and make it more affordable and predictable.
The web portal is the latest stop on the report’s road map. It makes it easy for those who lost their homes to choose among templates and pricing from builders who have been vetted by Project Recovery.
“We’re keeping a close eye” on the builders, Horne said. “Buyers are going to have a quality home at a quality price in a time frame they can count on.”
Horne is head of the Los Angeles chapter of the Urban Land Institute and president of real estate brokerage CBRE for Southern California. Other leaders of Project Recovery include Stuart Gabriel, director of the UCLA Ziman Center for Real Estate, and Richard Green, director of the USC Lusk Center for Real Estate.
Homeowners using the portal can match their address to home choices that include pre-designed turnkey residences at costs equal to or below average insurance proceeds, Horne said. Owners can also choose more custom builds.
The new Builders Alliance consists of 10 licensed homebuilders, ranging in size from small boutique firms to larger companies such as Richmond American Homes and Brookfield Residential.
Brookfield built more than 200 homes in the La Vina gated community in Altadena, 52 of which burned down, Chief Executive Adrian Foley said.
“Obviously, we were devastated by all of the loss that’s taken place here,” he said. “We wanted to lean in and do anything we could to help out.”
Foley said the consortium was devised to get large and small builders working together to “procure the right material costs and procure plans and specifications that would be appealing to the end user so we could collaborate to beat down costs, be more efficient, and hopefully drive a higher percentage of rebuilding.”
The consortium expects to complete some homes by the third quarter of 2026.
The foundation of the Builders Alliance portal is a digital representation that maps every residential parcel in the Palisades and Eaton fire areas. It uses AI technology and is powered by Canibuild, which provides site-planning software for the residential construction industry.
The portal’s map is trained on local zoning regulations and pairs each lot with extensive menus of designs and costs. Property owners enter their address and can filter options by preferences such as square footage, bedrooms, bathrooms and price.
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