As Washington grapples with the looming fight to fill a Supreme Court vacancy, the legislative agenda for the rest of 2020 has become murky. But depending on the outcome of the elections, the 2021 agenda is beginning to come into focus. In our last blog we outlined the upcoming game of musical chairs for the House Financial Services Committee (HFSC) Subcommittee chairs. Here we review the same for the Senate Banking, Housing & Urban Affairs Committee (SBC) as well as what Members of the SBC and HFSC may focus on in the new Congress come January 2021.
Senate Leadership & Chairmanships
Regardless of whether Republicans maintain control in the Senate or Democrats gain seats and capture the majority, the leadership structure for Republicans is unlikely to change. Majority Leader Mitch McConnell (KY) will either continue in his current role or become Minority Leader. The only possible change in Senate leadership could come if Senator Joni Ernst (IA) loses her reelection in Iowa. Senator Ernst currently serves as Vice Chairman of the Senate Republican Conference, a steppingstone position in leadership.
In contrast to the lack of change at the top of the Republican leadership structure, there are several Republican Chairs that are retiring (Senators Pat Roberts (KS), Mike Enzi (WY) and Lamar Alexander (TN). Sen. Chuck Grassley (IA) is term limited out of his role as Chair of the Finance Committee and is also term limited out of his role as Ranking Member should Republicans lose the Senate. It is expected that Senator Mike Crapo (ID), the current Chair of the SBC will assume either the Chair or Ranking Member position of Senate Finance. This change puts Senator Toomey (PA) next in line to be Chair or Ranking Member of the Banking Committee.
Should Senate Democrats take the majority, we do not anticipate any leadership shakeup and Minority Leader Schumer (NY) would ascend to be Senate Majority Leader, with most, if not all, of his leadership team remaining intact. Since very few current Democratic Senators that serve as Ranking Members are either up for re-election this year or retiring, and those who are up for re-election are heavily favored (i.e. Jack Reed (RI), Mark Warner (VA)), there is expected to be limited movement among the current Ranking Members if they were to become Committee Chairs in 2021. Senator Sherrod Brown (OH), the SBC’s current Ranking Member, would become Chair if Democrats take control of the Senate.
It is important to note that the Senate Democratic Caucus does not have a term-limit rule for either Chair or Ranking Member, but they do have a two-gavel rule (one full committee gavel and one subcommittee gavel, or two subcommittee gavels). An additional factor that could alter the expectation of most of the current Ranking Members becoming Chairs in 2021 is if any Senate Democrats are nominated by a potential President Biden to serve in the Cabinet or as an Ambassador.
As noted above, at the SBC, Senator Toomey is expected to take the gavel if Republicans maintain control of the upper chamber. While his priorities are somewhat unclear, in the past he has prioritized capital formation, housing finance reform, and scaling back the Consumer Financial Protection Bureau (CFPB). Sen. Toomey is likely to be more active than Sen. Crapo and he will prefer bipartisan legislation when possible but is not going to be as reluctant to move forward without it on issues he finds of great importance. Further, given his personal background in banking, he will likely have a more personal interest in some issues.
As mentioned above, should Democrats take the Senate Majority, Senator Brown is expected to take the gavel and has made clear he would prioritize affordable housing issues, racial disparities, oversight of the largest financial institutions, as well as enhanced consumer protections from a more active CFPB. Assuming no lame-duck passage, Bank Secrecy Act/Anti-Money Laundering and the broader beneficial ownership issues will also likely be priorities for a Sen. Brown chairmanship. Consideration of cannabis banking legislation could be dependent on movement of broader cannabis reform (such as federal legalization or de-scheduling).
Regardless of how the subcommittee chairs play out, the HFSC agenda will continue to be driven by Chairwoman Maxine Waters (CA-43) next Congress. As such, we expect the Committee to focus on undoing the Trump administration’s efforts to scale back the CFPB and on the more proactive policy goals that the Chairwoman feels have not gotten their due – both as a result of the COVID pandemic and the Trump administration’s agenda, which the Chairwoman has vocally opposed. While much of the 2021 agenda will continue to be related to the response to the pandemic, we expect HFSC to also focus on affordable housing issues, to reassert oversight in the private student loan space, and to continue efforts to reform the flood insurance program. Of note: because the Export-Import Bank and Terrorism Risk Insurance program received long-term extensions, neither is expected to take up much of the Committee’s time in the next Congress. We also expect an expanded focus for the Diversity and Inclusion (D&I) Subcommittee since the Subcommittee prioritized getting set up and other foundational issues over the last two years. Similar to the SBC, any focus on cannabis banking legislation at HFSC is largely dependent on broader cannabis reform.
The biggest change on HFSC for Republicans will occur if Biden wins in November. In that scenario, many of the moderate Republicans will not feel tied by having to support Trump policies, particularly in the trade space. However, Chairwoman Waters will also have greater power and the potential to advance legislation into law particularly on affordable housing issues. Apart from a few pieces of legislation (beneficial ownership and cannabis banking in particular) the Committee has largely marked up legislation this Congress without splitting the Republican caucus. Next Congress, Republicans may have a greater incentive to sign on to Democratic led initiatives that could be signed into law. Rep. French Hill (AR-2) is a prime Member to work with Democrats given his close ties with Democratic Members as well as the dynamics of his district, being a suburb of Little Rock. Additional targets could be Rep. Trey Hollingsworth (IN-9), Rep. Blaine Luetkemeyer (MO-3) and Rep. Steve Stivers (OH-15). Rep. Stivers has been particularly sensitive to many of the housing issues that Chairwoman Waters cares about.
The election is only 40 days away way and a lot can change between now and November 3. SFA will keep a close eye on election results and how they will impact policy agendas for the SBC and FSC in the 117th Congress.