The WASHINGTON-Midterm election will not track the Trump Administration's push to facilitate rules for banks, but democratic control over the…
The WASHINGTON-Midterm election will not track the Trump Administration’s push to facilitate rules for banks, but democratic control over the House will put Wall Street at the heart of heated political battles.
Tuesday’s interim results – Republican control of the Senate and Democratic control of the House – dampened the prospect of all but the most important measures of the Congress affecting the financial sector, such as expanding the availability of federal flood insurance.
While a split congress raises more partisan bickering, it does not necessarily signal a change in the Trump administration push to facilitate rules for financial companies. Legislators have already delegated to the Federal Reserve, the Securities and Exchange Commission and other authorities the power to restore Wall Street rules on the road.
Gridlock is likely to maintain this status quo, with regulatory letters in the hands of Trump. Appointed officials lead these authorities.
“Overall, threats to the largest banks will rise, but positive regulatory changes should develop more quietly,” Cowen & Co. wrote. analyst Jaret Seiberg Wednesday.
Rep. Maxine Waters (D., Calif.), One of the highest democratic critics in Wall Street and the Trump Administration, is ready to lead the Committee of Finance Committee, overseeing the financial sector and its regulators. With the end of the chair in her hand, she would have one-sided authority to wake up talking and call officials and executives to testify for witnesses that she could use to review Trump-appointed officials as well as financial companies.
In the Senate, the Republicans retain control over the Senate Bank Committee. Later Mike Crapo (R., Idaho), the current chairman, could keep his post or possibly win a campaign, in which case he is expected to pass the end of the late Pat Toomey (R., Pa.). [1
9659004] Meanwhile, bank monitors can push forward rewriting rules that affect bank stress tests, capital and liquidity rules and lending to low-income earners. Regulators may continue to rebuild the Volcker rules trade restrictions.
SEC is expected to proceed with a new suggested standard that controls how brokers deal with retailers. At the Consumer Agency for Financial Protection, the Senate could act within a few weeks to confirm a permanent Republican director and strengthen the Trumpad Administration’s effort to pinpoint what they consider to be excessive aggressive monitoring of this agency.
Still, the change of leadership in House gives Ms. Waters and other Democrats are a bullying pulpit for pressure regulators to change these rules, or at least delay them. They can call hearings about previous racial claims by the Consumer Agency’s law enforcement officer or grille the currency supervisor over its careful attempt to change the rules for bank lending to low and middle income beneficiaries under the Community Investment Act.
“I’m afraid [Ms. Waters] will use this as a tool to shock management, to really reduce deregulation deregulation,” Rep. Jeb Hensarling (R., Tex.), The Outgoing Chairman of the Financial Services Panel, said at Fox Business on Tuesday.
Before the election, Ms Waters issued a statement stating that she is aiming to ensure the financial system is fair, expanding affordable housing, supporting small businesses and implementing appropriate oversight of management and regulatory agencies.
Under its leadership, the Committee could train its private sector lens, including companies such as Wells Fargo & Co., which continues to conduct a thorough review of compliance issues;
The credit reporting company is responsible for a massive loss of sensitive consumer data last year. and
, who has had economic cooperation with the Trump family.
At the legislative front, lobbyists in the financial industry hope that the parties can find compromise areas. For example, financial companies see bipartisan support for legislation that allows them to get more flexible legislation that they seem to grow.
In the banking sector, bankers lobbyed legislators in both parties for legislation enabling them to serve state-sanctioned marijuana companies, despite a federal ban.
Legislators will also meet a mandatory to-do list. US Export-Import Bank’s charter expires in September 2019. Ms. Waters has supported the agency, but many conservatives in the Senate continue to question it.
The federally funded flood insurance program also expires at the end of this month. It is expected to be reauthorized in the short term, which means that legislators will have to deal with the issue again at the next congress.
-Yuka Hayashi, Gabriel T. Rubin and Lalita Clozel contributed to this article.