Election Postmortem: Current State of Play
- Leslie Sack, Head of Government Relations, SFA
- Ben Parish, Vice President, Government Relations, SFA
President elect-Biden: Vice President Joe Biden will be elected the 46th President, defeating President Donald Trump 306-232. President-Elect Biden’s transition team has noted that “diversity of ideology and background is a core value of the transition” but likely GOP Senate control will factor into the nomination process. The immediate focus will be on COVID relief legislation regardless of the resolution of lame duck negotiations and the Georgia runoff elections. Additionally, Biden will work to appoint his Cabinet as his transition team begins advising on policies and personnel to fill over 4,000 political appointments.
Former Goldman Sachs Partner and Obama CFTC Chairman Gary Gensler is leading the transition team for financials. KeyBank’s Director of Corporate Responsibility Community Outreach, Don Graves, is also advising the Biden transition team on financial services issues. A full list of Biden transition staff and volunteers is available here.
Control of Congress: Control of the Senate hangs in the balance at 50-48 with Republicans Thom Tillis (R-NC) and Dan Sullivan (R-AK) having been declared the winners in North Carolina and Alaska. If Democrats win both seats in Georgia on January 5, 2021 there will be a 50-50 tie and in that scenario Vice President-elect Kamala Harris casts the tiebreaking vote, giving Democrats control of the upper chamber.
In the House, Republicans exceeded expectations by ousting ten Democratic-held seats and all ten Republicans who beat those Democrats are women and/or minorities. Democrats will maintain their majority and control of the House, but Republicans will enter the 117th Congress having cut into the Democrats’ majority by more than half.
Senate Banking Committee (SBC): If Republicans retain control of the upper chamber, Senator Pat Toomey (R-PA) will serve as Chair of the SBC for the next two years until his announced 2022 retirement. Toomey has said the Committee agenda may focus on housing finance reform, expanding investment opportunities for middle-income Americans, fintech issues, payment systems, digital currency, and CFPB reform. There will be some new faces on SBC next congress, with both Senators Doug Jones (D-AL) and Martha McSally (R-AZ) losing their reelections. As noted above, Senator David Perdue (R-GA) will be on the ballot again in January runoff.
House Financial Services Committee (HFSC): Committee Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC) were reelected. It was an especially good night for HFSC Republican incumbents as Representatives Ann Wagner (R-MO), French Hill (R-AR), Andy Barr (R-KY) and Van Taylor (R-TX) all pulled off wins in expensive and tight races and although it has not been officially called, Lee Zeldin (R-NY) is also expected to win reelection. However, challenger Burgess Owens defeated Representative Ben McAdams (D-UT).
Of note, Representative Collin Peterson (D-MN), Chair of the House Agriculture Committee, lost his reelection. This has potential implications for the HFSC with Representative David Scott (D-GA) likely to take over as Chair of the Agriculture Committee. Another implication for the HFSC is the lead former Representative Claudia Tenney (R-NY) has over incumbent Representative Anthony Brindisi (D-NY). If Representative Tenney wins, she could potentially return to HFSC, where she served in the 115th Congress.
Chairwoman Waters is expected to focus on affordable housing, undoing the Trump Administration’s efforts to scale back the CFPB, and an expanded focus on diversity and inclusion.
117th Congress: President-elect Biden is likely set to inherit a closely divided Congress and will need to navigate a delicate policy tightrope with Congressional leadership in both parties to advance his legislative priorities. Under these political dynamics, banking priorities are likely to be narrower in scope, with an increased focus on LIBOR transition, Fintech and ESG. Moving comprehensive banking legislation through will be difficult and efforts to engage on issues of consumer lending and access to credit may be driven primarily by the regulators and unilateral administrative action.
SFA will continue to monitor election results and how they will impact the SBC’s and HFSC’s makeup and agendas. When the new Congress is sworn-in SFA staff will educate lawmakers selected to serve on these committees and help facilitate an informed, two-way dialogue on issues impacting the safe and sound functioning of the securitization market.