As it gets more and more expensive to win a seat in the Virginia General Assembly, the state legislature continues to find new ways to stifle efforts to put limits on the state’s wide-open campaign finance laws.
This year, several bills meant to slow the flow of money into Virginia politics have been blocked without lawmakers taking a recorded vote showing that’s what they’re doing.
For the last decade, proposals have been introduced to create stricter campaign finance limits in Virginia and boost public confidence that the legislature can’t be bought by special interests writing checks of unlimited size.
Some Democrats have been vocal about making campaign finance reform a priority, and many have accepted big checks from Clean Virginia, a well-funded advocacy group focused on energy and campaign finance reform that says its mission is to “fight corruption in Virginia politics.”
But the party’s retaking of full control of the General Assembly this year doesn’t appear to be producing any breakthroughs on campaign finance issues as Tuesday’s crossover deadline approaches. As the two chambers rush to finish work on their own bills, no major campaign finance legislation has made it through both sides of the Capitol. If those positions hold in the second half of the session, none of the bills will win final passage.
Instead, Democratic-sponsored campaign finance proposals are languishing in Democratic-controlled committees, where several bills have been allowed to expire without a hearing.
When Del. Josh Cole, D-Prince William, presented a bill that would prohibit candidates from accepting campaign money from public utilities like Dominion Energy, the proposal died without a vote when no one on the 22-member House Privileges and Elections Committee made a motion for or against it. A bill sponsored by Del. David Bulova, D-Fairfax, that would have set caps on donations from both corporations and individuals was never docketed by the same committee.
In an interview, Cole said he’ll keep fighting for campaign finance reform, despite his latest bill failing in an unusual fashion.
“Time will tell what will happen,” Cole said. “The appetite is definitely there for it.”
On the Senate side, another utility-focused campaign finance reform bill sponsored by Sen. Danica Roem, D-Prince William, made it out of the chamber’s elections committee, but stalled when it was sent to the Finance and Appropriations Committee. It never got a hearing there, despite being projected to have no impact on the state budget.
When asked why Roem’s bill wasn’t docketed, Sen. Louise Lucas, D-Portsmouth, who chairs the Senate Finance Committee, criticized the bill itself instead of offering any procedural explanation.
“The people who are complaining about Dominion being a monopoly want to replace them,” Lucas said. “They want to be the monopoly. So what’s the difference?”
Clean Virginia’s critics have often accused the organization and its main funder, wealthy Charlottesville investor Michael Bills, of engaging in a new form of influence-peddling by offering substantial checks to lawmakers who vow to stop accepting money from Dominion.
In an interview, Roem didn’t sound disheartened over her bill’s fate.
“This is the first time we’ve ever gotten out of committee. This still marks progress,” Roem said. “Clearly we have more steps to go.”
Nancy Morgan, a campaign finance reform advocate with BigMoneyOutVA, said Democratic leaders appear to be “strong-arming the members to kill the bills in untransparent ways.”
“Not allowing bills to be voted on, or even heard by legislators, is anathema to our democratic process,” Morgan’s group said in a statement last week.
A seemingly less controversial proposal to prohibit spending campaign cash on personal uses unrelated to politics — something already banned at the federal level and in almost every other state — looked to be on track to pass this year after clearing the state Senate 35-4 and passing the House elections committee unanimously. But the House version was bottled up in the budget-writing committee after three state agencies estimated it would cost them more than $745,000 to add more staff to implement the law.
However, the legislature’s own fiscal analysts sharply disagreed with that figure, saying the law would create virtually no new costs and wouldn’t substantially add to anyone’s existing workload.
“It just seemed highly inflated,” said Del. Cia Price, D-Newport News, who chairs the House elections committee and formally requested a second opinion on the steep cost estimate.
In a written analysis attached to the personal use bill, staffers at the Joint Legislative Audit and Review Commission said they concluded the proposal wouldn’t substantially burden state agencies after looking at similar laws in Georgia and Tennessee. Both states already have systems for investigating complaints and issuing advisory opinions similar to what the Virginia proposal envisioned, JLARC found, and the strain on staff is minimal because there are usually just a few cases to handle per year.
“JLARC estimates the fiscal impact of the bill would be negligible,” the General Assembly’s analysts said in their rebuttal to the estimates from the Virginia Department of Elections and Virginia Department of Corrections.
The JLARC statement didn’t address an additional $429,426 estimate from the office of Attorney General Jason Miyares, which claimed it would need two additional attorneys and a paralegal to help implement the law.
Despite JLARC disputing the projected costs of the personal use bill, Del. Marcus Simon, D-Fairfax, said its chances of passage are now “slim to none” after failing to pass the House. The House can still take up the Senate version of the bill, but Simon said it’s unlikely to be a priority for the body late in the session as lawmakers try to finalize more big-ticket items.
Despite Simon’s less-than-optimistic prediction about the fate of efforts to ban the personal use of campaign money, Clean Virginia said it still hopes a “commonsense ban” can pass this year after clearing the Senate with an “overwhelming bipartisan majority.”
“Passage of this bill would represent a strong first step towards comprehensive campaign finance and ethics reform in Virginia,” said Clean Virginia Legislative Director Dan Holmes.
General Assembly members and statewide officeholders are prohibited from raising campaign funds during legislative sessions, but the latest effort to extend that ban to special sessions also appears to be on track to die without lawmakers attaching their names to a vote.
A bipartisan bill banning fundraising during “active” special sessions made it to the Senate floor. But in an unrecorded voice vote last week, the Senate chose to send the bill back to its elections committee, a maneuver that killed the bill because the panel was already done with its work on Senate bills.
On the floor, Senate Majority Leader Scott Surovell, D-Fairfax, said the bill “had a lot of issues.”
“It’s going to create more problems than it’s going to solve,” Surovell said.
Sen. David Suetterlein, R-Roanoke, the bill’s sponsor, objected to the move, saying his legislation appeared to be heading for the same death by unrecorded vote that often befalls bills to ban the personal use of campaign funds.
“Every year it found a different way to die on an unrecorded vote,” Suetterlein said.
Mercury reporters Nathaniel Cline and Charlie Paullin contributed to this story.
GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Ukraine’s finance minister: How we’ve coped with two years of war
Sergii Marchenko is Ukraine’s minister of finance
In February 2022, the Ukrainian government faced challenges on a previously unseen scale. Sea ports were blocked, there were millions of refugees, the heavy industrial sector was demolished and 90% of enterprises suspended their operations.
eCommerce Platforms Make the Leap Into One-Stop-Shop Embedded Trade Finance
For the merchants doing business online, serving consumers and even buying goods and services from one another, working capital is a lifeline. Working capital provides the ready cash needed to buy inventory, pay staff and take advantage of growth opportunities.
A number of eCommerce platforms have made the leap into providing capital to those businesses — a form of embedded finance — along with, in some cases, virtual cards.
As we noted here this past week, Home Depot said it was piloting trade credit options, and management said that HD Supply (which Home Depot acquired in 2020) already offers that function. Commentary on the earnings call noted that the piloted options are part of “enhanced digital capabilities,” which we’d contend is a nod to the fact that online/platform channels are becoming key ways to reach those smaller businesses.
Elsewhere, in its latest 10-K filing with the Securities and Exchange Commission, PayPal detailed that it offers access to merchant finance products for smaller businesses, including PayPal Business Loans. The latest holdings on the balance sheet stood at $1.2 billion in receivables.
Launching Credit Options
Shopify said last summer that it had launched Shopify Credit, a pay-in-full card for Shopify merchants, with the ability to earn cash back and issue cards to enterprises’ staff members (along with spend limit features). The latest corporate filings reveal that, overall, Shopify’s loans and merchant cash advances, on a net basis, were $816 million at the end of 2023, up from $580 million.
We’ll know more about the state of merchant financing when Block reports earnings tonight (Feb. 22). As we noted in our coverage of the latest stats, in Block’s earnings results, the company noted in its investor materials that Square Loans facilitated approximately 120,000 loans totaling $1.17 billion in originations, up 4% year over year.
The platform models offer these smaller firms — already establishing storefronts and a digital presence online as they seek to broaden their reach — a range of embedded finance options.
And as PYMNTS Intelligence data has found, a significant percentage of Main Street SMBs have been moving online at the end of last year, even if they have brick-and-mortar locations.
The companies that are online are sanguine about their prospects: 57% for those who sell mostly online (and conceivably on platforms) say their revenues will grow this year, and that tally rises to 61% that have an even split between eCommerce and physical locations.
Elsewhere, we noted that only 47% of SMBs with annual revenues of $10 million or less had access to business or personal financing. That leaves roughly half without access, and 8% of SMBs have access to only personal financing. Almost half of Main Street SMBs say they plan to increase the use of credit products headed into 2024 — setting the stage for the platforms to see some gains in their embedded finance businesses.
AI Will Transform Finance, But Not With Personalised Card Offers
If you read any business or finance news, you would have found it impossible not to notice that there was another Davos last month. I rather agree with Andrew Curry, who says that the worst thing about the event is the temptation to take it seriously, but business leaders do turn up there to make speeches and it can be useful to listen to them to spot key themes. This year, as would expect, artificial intelligence (AI) was centre stage.
AI Is The Future of Fintech
Bryan Zhang (the executive director and co-founder of the Cambridge Centre for Alternative Finance at The University of Cambridge Judge Business School) presented the results of their research on the future of global fintech. The study gathered data from 227 fintechs across five verticals (digital lending, digital capital raising, digital payments, digital banking & savings and insurtech) across the Asia-Pacific, European, Latin America and Caribbean, Middle East & North African, North American and Sub-Saharan African regions. Almost three-quarters of those surveyed identified AI as the most important factor in the development of fintech in the next five years (and almost half of them pointed to embedded finance, open banking and the digital economy as the second most important factors).
I think these findings are uncontroversial. We can all agree that the fintech sector is poised to be significantly transformed by advances in artificial intelligence (AI) across a number of areas. But how, exactly? And where will the biggest impact be? Scanning through various reports, news feeds and post I can see a number of key business functions that will be affected. Here are a few of them:
Personalised Banking and Services: One of first and most obvious uses of AI, building on the masses of historical data available to banks, will be to push much more personalised products and services to customers. AI can help banks and their fintech competitors to create tailored offerings for each individual, ranging from from customised credit cards to unique savings plans;
Regulatory Compliance (RegTech): AI will help in the development of systems that can automatically adapt to new regulations and ensure compliance more efficiently. In my view, the next really big fintech businesses will actually be regtech businesses and AI is certain to power them;
Enhancing Robotic Process Automation (RPA): In their book “The Future of Finance”, Henri Arslanian and Fabrice Fisher pointed out that while automation can be enabled with relatively unsophisticated RPA technology, for more complex processes with more varied inputs, more sophisticated techniques are needed. Thus AI, combined with RPA, will result in cost savings and increased efficiency for financial institutions;
Credit Decisions and Risk Management: AI systems will help financial institutions make better lending decisions and manage risk more effectively. As a result, the market is moving towards insights-driven lending rather than expert judgement, which helps maximise rejection of high-risks customers and minimise rejection of creditworthy customers;
Investment and Trading: Mihir Desai, a Professor of Finance at Harvard Business School, points at two significant disruptions: the rise of passive fund managers and the growing dominance of quantitative investing because of the ability to analyze large amounts of data quickly. He thinks that these trends in finance suggests that an AI-dominated future can create “outsized” winners and losers pretty quickly;
Customer Support and Chatbots: AI-powered chatbots and virtual assistants will become more nuanced and capable of handling complex customer service inquiries, providing instant support and freeing up human resources for more strategic tasks. Personally, I am interacting with a bank chatbot, I don’t really care whether it is a person or not provided it does what I want; and
Fraud Detection and Security: I think this area is particularly concerning, because of the tidal wave of fraud that AI will unleash and the corresponding fintech opportunities to harness AI to get us to higher ground, as discussed in the recent U.S. Financial Services Committee hearing about the opportunities and risks associated with AI.
All of these uses of AI are, frankly, pretty unremarkable. But I think what a lot of this kind of analysis lacks is a recognition of the fact that it is the customers’ use of AI that will take the sector in some unexpected directions, not the banks’ use of AI. As I have written here before, financial services organisations need to pay strategic attention to the impending switch from human to machine customers.
Persuade My Bot!
The brilliant Cathy Hackl wrote about this a few years ago, noting that traditional marketing is all about the consumer, so marketers spend their effort of creating compelling narratives to connect with those consumers. Their goal is just to create demand for a product to but to build brand and relationships. That’s great for B2C and B2B2C, but what happens when we find ourselves in the world of Business-to-Robot-to-Consumer (B2R2C) commerce?
What happens to the accumulated knowledge and experience of the marketing department in a retail bank when banks will have to convince robots – rather than humans – that their deal is the best in the market? The robots won’t care about the Superbowl commerical. The robots won’t care about the race team sponsorship. The robots will be supremely indifferent to the brand colour and logo.
But what will they care about?
Aggies use huge second half versus Arkansas to snap two game losing streak
Biden Meets With Navalny's Widow in California
Kane, Larkin supply heroics as Wings defeat Colorado 2-1 in OT
Connecticut Sinks Deeper into Debt, Hidden Behind Budget Surpluses
Rodgers scores 20, Charleston cruises past Delaware 90-71
See it: Tesla crashes into Columbus convention center at 70 mph
Colorado Rockies game no. 116 thread: Zac Gallen vs José Ureña
Fox News Politics: Georgia the whole day through
Death of missing Oregon girl found in stream ruled homicide
At least 2 dead as tornadoes hit Alabama, damage homes across Southeast
Special attorney hired by Fani Willis to help prosecute Trump donated big bucks to her campaign
US, European powers back outgoing Dutch PM Mark Rutte as next NATO head
Ex-FBI source accused of lying about Bidens and having Russian contacts is returned to US custody
A 30-year-old North Carolina education funding argument is back in the state Supreme Court
Zelenskyy asks Brussels to defuse Polish farmer dispute
World1 week ago
Borrell slams US for deploring Gaza deaths while giving arms to Israel
World1 week ago
Do not undermine NATO's credibility: Stoltenberg rebukes Donald Trump
World1 week ago
Photos: One killed in shooting at Kansas City Super Bowl victory parade
News1 week ago
Video: Crowds Flee Scene of Shooting Near Kansas City Super Bowl Parade
Politics1 week ago
Trump endorses new RNC chair, announces daughter-in-law's run for vice chair
News1 week ago
1 killed at Chiefs parade shooting; Russia is developing a space-based nuclear device
Politics1 week ago
Democrats win seat, Republicans win impeachment, two presidents clash over NATO
World1 week ago
Iran simulates strike on Israeli base as it showcases naval force