The outlook for Wall Avenue darkens as Biden’s regulators take form from Reuters
© Reuters. FILE PHOTO: Commodity Futures Trading Commission Chairman Gensler testifies at a Senate Committee on Banking, Housing and Urban Affairs hearing on Capitol Hill
By Michelle Price
WASHINGTON (Reuters) – Wall Street could face an nasty problem four years after President-elect Joe Biden’s team was confirmed on Monday. It has planned to nominate two consumer champions to run the top financial agencies, which signals a tougher stance on the industry than many expected.
Gary Gensler will chair the Securities and Exchange Commission (SEC) and Rohit Chopra, a member of the Federal Trade Commission, will lead the Consumer Financial Protection Bureau (CFPB). Progressives see the agencies as critical to advancing policy priorities related to climate change and social justice.
Wall Street-friendly Republicans on Monday criticized Biden for bowing to leftists, warning the selection would be divisive.
“The Biden team is looking for members of the far left,” said Patrick McHenry, senior Republican on the House of Representatives finance committee, of Chopra while warning Gensler “to resist pressure to order our securities disclosure regime to.” try not to have economic or social problems. “
Gensler, chairman of the derivatives regulator from 2009 to 2014, implemented new swap trading rules introduced by Congress after the financial crisis, and developed a reputation for a tough operator willing to face the strong interests of Wall Street.
Chopra helped set up the CFPB after the crisis and was its first student loan ombudsman. At the FTC, he advocated stricter rules for large tech companies on consumer protection and competition, as well as stricter enforcement penalties.
DEMOCRATS IN CONTROL
With Republicans appearing to have a good chance of maintaining control of the Senate after the November 3rd election, finance executives had hoped Biden would make more moderate decisions. But Democratic wins in two Georgia runoffs earlier this month mean Democrats will effectively control the chamber once Biden and Vice President-elect Kamala Harris are sworn in on Wednesday.
Those victories also mean Sherrod Brown, a Wall Street firefighter, will head the Senate’s powerful banking committee. He has announced that he will try to overturn the Wall Street-friendly rules put in place by President Donald Trump’s regulators.
On Monday, Brown hailed Chopra as a “brave” election that would ensure that the CFPB “plays a leading role in tackling racial inequalities in our financial system,” while Gensler “holds bad actors accountable” and “working families first Place “would.
Gensler is expected to follow up on new company disclosures on risks related to climate change, political issues, the composition and treatment of company employees, and finalize executive compensation restrictions after the crisis, among other things.
Chopra is expected to review payday loan and debt collection rules, which influential consumer groups say do not protect Americans. They also hope it will stamp out exorbitant lending rates and abusive debt collection practices, eliminate student debt and gaps in minority access to credit.
“The CFPB has an incredibly important job to do, including ending financial rip-offs,” said Lisa Donner, executive director of Americans for Financial Reform, a think tank. “It also plays an urgent role in helping families survive and recover from the economic crisis sparked by the pandemic.”
However, Biden must first fire Kathy Kraninger, the current CFPB director, a power he will have thanks to a Supreme Court ruling last year that the CFPB director served at the will of the president.
But Richard Hunt, executive director of the Consumer Bankers Association, rejected the idea that Biden should use that power automatically.
“CBA doesn’t believe it is in the best interests of consumers to have a new director every time there is a change of administration. That whiplash effect will stifle innovation and prevent uniform regulation,” said Hunt in a normally haunted statement.