Big-bank breakups, postal lending and more: 2020 Dem hopefuls' financial agendas

November 13, 2018 9:00 PM

Votes are still being counted in last week's midterm elections and already much of the political discussion has shifted to the 2020 presidential contest.

From progressives on the left, to those popular in states seen as pivotal in the next election, a potential Democratic field is already building at a fever pace. They include policymakers with a deep record on banking issues and those whose financial services policy agenda is a relative mystery.

Here are 11 potential presidential contenders and how they are intertwined with financial services issues:

Bernie Sanders

Senator Bernie Sanders, an Independent from Vermont, gestures as he speaks during a campaign rally for Representative Jacky Rosen, a Democrat from Nevada and Democratic U.S. Senate candidate, not pictured, in Las Vegas, Nevada, U.S., on Thursday, Oct. 25, 2018. Rosen's campaign says it raised nearly $5.1 million from Oct. 1 through Oct. 17, raising more than three times as much as incumbent Republican Senator Dean Heller in the third quarter. Photographer: Bridget Bennett/Bloomberg

Bridget Bennett/Bloomberg

Sen. Bernie Sanders, I-Vt., has long been sharply critical of the big banks, both as a senator and a presidential candidate in 2016. He has supported ideas such as restoring the Glass-Steagall Act, having the U.S. Postal Service offer banking services, and placing growth limits on the largest institutions.

In October, Sanders introduced a bill to cap a financial institution’s total exposure at 3% of the nation’s GDP, and break up any bank that exceeded that cap. When the bill was unveiled, six financial institutions would have been above that threshold.

“Today, the four largest financial institutions in this country are on average 80% larger than they were before we bailed them out,” Sanders said at the bill’s unveiling.

On the campaign trail in 2016, Sanders excoriated the industry, and he would likely resume his criticism of bankers if he ran again in 2020.

During one speech over two years ago, Sanders supporters — referring to big banks — started chanting, “Break them up, break them up.”

"Within the first 100 days of my administration, I will require the secretary of the Treasury Department to establish a 'too big to fail' list of commercial banks, shadow banks and insurance companies whose failure would pose a catastrophic risk to the United States economy without a taxpayer bailout," Sanders said in 2016. "Within one year, my administration will break these institutions up so that they no longer pose a grave threat to the economy as authorized under" the Dodd-Frank Act.

Elizabeth Warren

Senator Elizabeth Warren, a Democrat from Massachusetts, speaks to members of the media during a Senate Judiciary Committee hearing in Washington, D.C., U.S., on Thursday, Sept. 27, 2018. Chairman Chuck Grassley called for a "safe, comfortable and dignified" hearing Thursday on a sexual assault allegation against Brett Kavanaugh as the panel opened a historic hearing that promises to shape the Supreme Court's future and redefine the "Me Too" era. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

One of the most discussed potential contenders in 2020 remains Sen. Elizabeth Warren, D-Mass., who has cemented her national profile in large part through her outspoken criticism of the banking industry.

Warren has criticized the country’s largest banks for being “too big to fail” — spurring calls to revive the Depression-era Glass-Steagall Act — and has slammed regulators for not putting bankers in jail after the financial crisis. She has also been a vocal supporter of postal banking and a prominent backer of the Consumer Financial Protection Bureau, the agency she helped create before running for Congress.

Warren has given clues to her banking agenda as a presidential candidate. In September, she proposed a bill to apply Community Reinvestment Act requirements to a broader array of financial institutions and establish tougher penalties for CRA violations.

She was also a top opponent of the regulatory relief bill that passed the Republican-led Congress this past spring.In March, Warren said of the bipartisan reg relief package then nearing passage in the Senate, "I don't think a bill like that is good for anybody in America."

But she has at times taken positions intended to help smaller financial institutions. In June, she co-sponsored a bill intended to give legal cannabis businesses greater access to banking services, and the legislation received support from President Trump.

Sherrod Brown

Senator Sherrod Brown, a Democrat from Ohio, speaks during a campaign rally for Richard Cordray, Democratic nominee for governor of Ohio, in Cleveland, Ohio, U.S., on Thursday, Sept. 13, 2018. Cordray is a former U.S. President Barack Obama appointee who was director of the Consumer Financial Protection Bureau, the federal watchdog agency now being overhauled by Trump's administration. Photographer: Allison Farrand/Bloomberg

Allison Farrand/Bloomberg

Sen. Sherrod Brown, a Democratic senator from Ohio and the ranking member of the Banking Committee, signaled presidential ambitions in an interview Monday. If he throws his hat in the ring along with Warren and Sanders, all three would pose risks to the large banks from their views on regulation.

Brown notably voted against the reg relief bill passed by Congress in the spring, has supported making penalties on Wells Fargo tougher in light the bank’s numerous scandals and in the past spearheaded a proposed bill to hike big banks’ capital requirements to the extent that they would have to be broken up.

Of the reg relief bill, Brown said: “Today, special interests win again. The president signed into law a giveaway that loosens rules for the same big banks that helped crash the economy a decade ago, leaving Americans taxpayers responsible for a $239 billion bailout. Banks are making record profits and hardworking Americans shouldn’t have to pay for favors to Wall Street, foreign megabanks and their lobbyists.”

Yet Brown has also sympathized with regional banks that found themselves grouped with the largest institutions as part of the enhanced supervision program implemented by the Federal Reserve following the crisis. His home state of Ohio has several leading midsize institutions, including Fifth Third, KeyBank and Huntington National Bank.

Kamala Harris

Senator Kamala Harris, a Democrat from California, center, speaks to members of the media after walking out of a markup hearing as Senator Mazie Hirono, a Democrat from Hawaii, left, listens in Washington, D.C., U.S., on Friday, Sept. 28, 2018. Supreme Court nominee Brett Kavanaugh appears headed toward approval by the Senate Judiciary Committee after pivotal GOP Senator Jeff Flake said he'll vote to confirm the nominee. Photographer: Aaron P. Bernstein/Bloomberg

Aaron P. Bernstein/Bloomberg

Sen. Kamala Harris, D-Calif., is another presidential contender who voted against last spring’s reg relief legislation.

“The American people deserve an economy where Main Street is protected from the excesses of Wall Street. After 2008, when Wall Street recklessly triggered the worst financial crisis since the Great Depression, Congress put in place a number of common-sense safeguards to protect taxpayers and reduce the risk of another major recession,” she said in a March 14 statement. “The bill that the Senate passed today needlessly weakens those protections.”

But Harris has been criticized by some on the left for not taking action against OneWest Bank when she was California’s attorney general and the bank was run by now-Treasury Secretary Steven Mnuchin, for alleged violations of foreclosure laws.

A leaked memo from the California Attorney General's Office had recommended that Harris pursue a civil enforcement action against the bank, but she declined.

Cory Booker

Senator Cory Booker, a Democrat from New Jersey, speaks during a confirmation committee hearing for Brett Kavanaugh, U.S. Supreme Court associate justice nominee for U.S. President Donald Trump, not pictured, in Washington, D.C., U.S., on Sept. 7, 2018. Kavanaugh yesterday steered clear of trouble in a marathon day before a Senate panel, refusing to say whether he would overturn the constitutional right to abortion or disqualify himself from any case directly involving Trump. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

Sen. Cory Booker, D-N.J., is not a member of the Banking Committee, but he has begun to speak out on a few key banking issues.

Most notably, he teamed up earlier this year with Brown, another potential contender for the White House, on a bill to ban overdraft fees on debit card transactions and ATM withdrawals — to the chagrin of the banking industry. While the bill has yet to gain momentum, it signals that Booker, albeit from a finance-heavy state, could be tacking left on financial policy as the country moves closer to the 2020 elections. That’s despite a history of large contributions from the financial industry in past elections.

Like many others on this list, he also voted against the regulatory relief bill for regional and community banks passed this spring.

Kirsten Gillibrand

Senator Kirsten Gillibrand, a Democrat from New York, arrives for a Senate Judiciary Committee hearing in Washington, D.C., U.S., on Thursday, Sept. 27, 2018. Supreme Court nominee Brett Kavanaugh and a woman who accuses him of sexual assault will present dueling accounts of what happened -- or didnt happen -- 36 years ago, as senators hold a historic hearing that will shape the court's future and redefine the "Me Too" era. Photographer: Aaron P. Bernstein/Bloomberg

Aaron P. Bernstein/Bloomberg

The New York senator has had a complicated record on financial services policy.

Gillibrand, who was a moderate in the House and a member of the pro-business Blue Dog Coalition, has drawn large contributions from the financial industry and at times taken positions aligned with big bank during her time in Congress.

In 2010, she expressed concern that derivatives restrictions proposed in the financial reform debate — which resulted in the Dodd-Frank Act — could go too far. In 2012, as regulators were implementing the Volcker Rule to ban banks’ proprietary trading, Gillibrand cautioned them not to eliminate “market-making” practices.

“The ability of firms to continue to make markets, particularly in less liquid markets where buyers and sellers are not always immediately available, is important for the continued competitiveness of the U.S. financial industry and the broader strength of the U.S. economic system which relies on deeply liquid financial markets,” she wrote in a comment letter. “As you proceed with the final rule, I encourage you to continue to strive to strike this important balance to ensure that our financial institutions remain both safe and competitive.”

But she has attempted to build a more progressive record of late. Gillibrand opposed the bipartisan regulatory relief package enacted in May. Last August, she joined other Democratic colleagues to oppose a pending proposal to ease the Volcker Rule compliance process, and in April she unveiled a legislative proposal to enable the U.S. Postal Service to compete with payday lenders in delivering consumer financial services to those who lack mainstream banking ties.

“The federal government has backed financial institutions directly and indirectly for decades with FDIC insurance, FHA backing, and bailouts,” Gillibrand tweeted in April. “But those 'for-profit' banks have left too many behind. It's time to close the gap — and this time, no one will get rich on the taxpayers' dime. This is a simple solution to a problem facing every state in this country.”

Joe Biden

Former U.S. Vice President Joe Biden gestures as he speaks at the Skybridge Alternatives (SALT) conference in Las Vegas, Nevada, U.S., on Thursday, May 18, 2017. The SALT Conference facilitates balanced discussions and debates on macro-economic trends, geo-political events and alternative investment opportunities for the year ahead. Photographer: David Paul Morris/Bloomberg

David Paul Morris/Bloomberg

As President Obama’s vice president, Joe Biden is closely associated with the Dodd-Frank Act, which the administration supported during its creation and sharply defended after its passage in 2010.

But as a longtime Delaware senator, Biden has historic ties with the financial industry, particularly the credit card companies, that could complicate his messaging on bank reform should he decide to run for president in 2020.

He is likely to have to account for pro-industry votes from earlier in his career, such as his support for removing parts of the Glass-Steagall Act separating commercial and investment banking. He was also a vocal supporter of a banking-backed bankruptcy bill that passed in 2005 over the strenuous objections of then-Professor Elizabeth Warren, who had argued the legislation would hurt indebted consumers.

Amy Klobuchar

Senator Amy Klobuchar, a Democrat from Minnesota, speaks during a Senate Judiciary Committee markup hearing in Washington, D.C., U.S., on Friday, Sept. 28, 2018. Supreme Court nominee Brett Kavanaugh appears headed toward approval by the Senate Judiciary Committee after pivotal Flake said he'll vote to confirm the nominee. Photographer: Aaron P. Bernstein/Bloomberg

Aaron P. Bernstein/Bloomberg

Like other Democratic senators who are mentioned as possible 2020 contenders, Amy Klobuchar of Minnesota voted against the bipartisan regulatory relief bill enacted in the spring.

Similar to Brown, Klobuchar has attracted attention as a potential candidate since she is a popular senator from the Midwest — a region key to the political map — who easily won her re-election bid this November.

Her views on financial are unclear. However, Klobuchar offered a key amendment in the 2010 run-up to the passage of Dodd-Frank. The original Senate version the bill, introduced by then-Sen. Christopher Dodd, D-Conn., would have stripped the Federal Reserve’s authority to regulate small banks (those with assets below $50 billion). But Klobuchar sponsored an amendment for the central bank to retain that authority.

Michael Bloomberg

Michael Bloomberg, founder of Bloomberg LP, speaks at a discussion during the spring meetings of the International Monetary Fund (IMF) and World Bank in Washington, D.C., U.S., on Thursday, April 19, 2018. The IMF said this week the world's debt load has ballooned to a record $164 trillion, a trend that could make it harder for countries to respond to the next recession and pay off debts if financing conditions tighten. Photographer: Andrew Harrer/Bloomberg

Andrew Harrer/Bloomberg

Michael Bloomberg, the billionaire businessman, philanthropist and former mayor of New York, revealed in October that he had reregistered as a Democrat, which fueled speculation that he is mulling a presidential run.

It is not entirely clear what his platform on financial services would be, but he may be more bank-friendly than many of his other competitors considering he has previously criticized post-crisis regulatory reforms. He called laws such as Dodd-Frank “really dysfunctional” in remarks in 2014.

"The trouble is if you reduce the risk at these institutions, they can't make the money they did," Bloomberg said. "If they can't make the money they did, they can't provide the financing that this country and this world needs to create jobs and build infrastructure."

John Delaney

Representative John Delaney, a Democrat from Maryland and 2020 presidential candidate, speaks during the Democratic Wing Ding event in Clear Lake, Iowa, U.S., on Friday, Aug. 10, 2018. The event in its 15th year of operation is a Democratic fundraiser that benefits participating county parties. Photographer: Daniel Acker/Bloomberg

Daniel Acker/Bloomberg

Rep. John Delaney, who announced last year that he would not run for re-election in order to focus on a presidential run, is obscure on the national stage compared to more high-profile Democrats. But the House Democrat from Maryland is well known in the financial services industry.

A former banker who ran the commercial lender CapitalSource, Delaney has dug into complex policy issues as a member of the House Financial Services Committee, particularly how to reform the housing finance system. In 2014, he introduced a plan with other Democrats to give a larger housing finance role to Ginnie Mae. He co-drafted a similar plan this year with House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and fellow House Democrat Jim Himes.

“Ten years after the financial crisis, our housing finance system remains broken,” Delaney said in September when the latest plan was introduced. “There’s still too much entity risk, not enough affordability, and we haven’t taken comprehensive action to make the system safer for taxpayers long-term.”

Deval Patrick

Deval Patrick, governor of Massachusetts, speaks at the Democratic National Convention (DNC) in Charlotte, North Carolina, U.S., on Tuesday, Sept. 4, 2012. San Antonio Mayor Julian Castro, a Stanford University and Harvard Law School graduate, has the role of first Hispanic keynote speaker at the Democratic National Convention. Photographer: Scott Eells/Bloomberg *** Local Caption *** Deval Patrick

Scott Eells/Bloomberg

Deval Patrick, the former governor of Massachusetts who is considering a presidential run, has held multiple jobs in the financial sector. In 2015, he joined Bain Capital as a managing director (it was founded by his predecessor in office, Mitt Romney).

Between 2004 and 2006, Patrick served on the board of ACC Capital Holdings, the parent company of Ameriquest, at the time one of the largest subprime mortgage lenders in the country. Patrick, an attorney, was brought on to help manage multiple predatory-lending investigations into the company. As governor, he drew criticism for contacting Citigroup executive Robert Rubin, a former Treasury secretary, on behalf of ACC Capital, which was looking for financial help.

His financial regulatory views are largely unknown but Patrick is often mentioned as a political acolyte of President Obama, suggesting he would strongly defend Dodd-Frank.