A banker’s guide to Super Tuesday

WASHINGTON — After 10 Democratic presidential debates, the candidates have uttered barely a murmur on their financial policy views as the campaign has been dominated by health care and other domestic issues.

But most of the Democrats still contending in the race, with the South Carolina primary and Super Tuesday contests just around the corner, have given some sense of their regulatory views either on their campaign websites or through past records.

With the front-runner Sen. Bernie Sanders supporting a dramatic restructuring of the banking industry, the results of the next wave of primaries could have a sizable impact on U.S. markets.

The Vermont independent has garnered the most delegates of any candidate so far, putting the industry on notice.

“It appears to us that Sen. Bernie Sanders is not just solidifying his position but also could be a bigger threat to President Trump in the general election than the market appreciates,” Jaret Seiberg, an analyst at Cowen Washington Research Group, said in a note Monday. “That would represent a major threat to financials and housing as Sanders has the most punitive agenda for these sectors given his plans for taxes and regulation.”

Sanders is not the only Wall Street critic on the ballot. Sen. Elizabeth Warren, D-Mass., is a known entity to the banking industry as a tough questioner in Senate Banking Committee hearings and as the architect of the Consumer Financial Protection Bureau.

The other five Democrats are seen as less hostile to the banking industry, though their potential presidencies would likely mark a shift from the deregulatory approach of the Trump administration. Under Trump, bankers scored a significant victory with the passage of a Dodd-Frank regulatory relief bill, known as S 2155.

But it’s unclear whether moderate Democrats will be able to stop Sanders from becoming the party’s nominee to challenge Trump in November.

Here is an update on the banking policy views of the top seven candidates still in the field.

Tom Steyer
Democratic Presidential Candidates Join Culinary Workers Union On Picket Line
Tom Steyer, co-founder of NextGen Climate Action Committee and 2020 Democratic presidential candidate, walks in the picket line with Culinary Workers Union Local 226 Members outside of the Palms Casino Resort in Las Vegas, Nev. Photographer: Joe Buglewicz/Bloomberg
Although Tom Steyer’s financial services policies are less explicitly detailed than the other Democratic candidates, the billioniare co-founded Beneficial State Bank, a community development bank in Oakland, Calif., that offers commercial banking services to underserved small and midsize businesses, nonprofits, affordable housing developers, community facilities and families.

Steyer is no longer part of the bank’s leadership, but his wife is said still to be involved with the institution.

According to a report by The Mercury News, the bank has a history of lawsuits against low-income borrowers and charging up to 27.99% interest rates on auto loans.

On his campaign website, Steyer says he opposes “unchecked capitalism” and supports “people over profits.”
Sen. Amy Klobuchar
Candidates Attend 2020 Democratic Primary Presidential Debate
Senator Amy Klobuchar, a Democrat from Minnesota and 2020 presidential candidate, speaks to members of the media following the Democratic presidential candidate debate in Las Vegas, Nevada, U.S., on Wednesday, Feb. 19, 2020. Beneath all of the sparring between candidates leading up to the debate is a broader strategic question that Democrats must address: Whether the best way to beat President Donald Trump in November is by reassuring moderates with kitchen-table proposals or by bolstering turnout with aggressive ideas that create a clear contrast. Photographer: Joe Buglewicz/Bloomberg
Sen. Amy Klobuchar’s legislative priorities in the banking space are less clear, but the Minnesota Democrat opposed the regulatory relief bill S 2155 and did not support the confirmation of Federal Reserve Vice Chairman of Supervision Randal Quarles. However, she is the only senator currently running for president who voted “yes” to confirm Powell as chairman of the Fed.

But as the ranking member of the Judiciary Committee’s subcommittee on antitrust, competition policy and consumer rights, Klobuchar has been a proponent for strict antitrust enforcement. If she were elected, her administration would likely apply greater scrutiny to view any mergers involving large banks.

Klobuchar’s campaign also highlights the need for consumer privacy protections to keep up with the pace of technological advances. She advocates legislation requiring companies to implement strong data security policies; receive affirmative consent from consumers for collecting sensitive information; and give consumers, states and the Federal Trade Commission new enforcement authorities.
Former South Bend, Ind., Mayor Pete Buttigieg
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Pete Buttigieg, former mayor of South Bend and 2020 presidential candidate, speaks during the League of United Latin American Citizens (LULAC) Presidential Town Hall in Las Vegas, Nevada, U.S., on Thursday, Feb. 13, 2020. Photographer: Joe Buglewicz/Bloomberg
Pete Buttigieg has not been able to cast any votes on banking legislation, nor has he cast any votes supporting or opposing the confirmation of any of Trump’s financial regulators.

But his campaign website includes a bullet list of plans to protect consumers. Buttigieg calls for stricter regulations on predatory lenders, tougher antitrust standards, protecting consumers’ rights concerning their data, strengthening the CFPB’s enforcement authority, and fighting big-data discrimination. However, he offers few details about the specific policies he plans to implement.

As part of his plan to ensure affordable housing, Buttigieg calls for a reversal of any efforts to gut the Community Reinvestment Act. He says he wants to ensure that new financial technologies like algorithmic mortgage tools do not produce racial bias. And he wants to increase penalties for violations of the Fair Housing Act.
Sen. Elizabeth Warren
Candidates Attend 2020 Democratic Primary Presidential Debate
Senator Elizabeth Warren, a Democrat from Massachusetts and 2020 presidential candidate, speaks to members of the media following the Democratic presidential candidate debate in Las Vegas, Nevada, U.S., on Wednesday, Feb. 19, 2020. Beneath all of the sparring between candidates leading up to the debate is a broader strategic question that Democrats must address: Whether the best way to beat President Donald Trump in November is by reassuring moderates with kitchen-table proposals or by bolstering turnout with aggressive ideas that create a clear contrast. Photographer: Joe Buglewicz/Bloomberg
The Massachusetts senator is synonymous with the Consumer Financial Protection Bureau, an agency the banking industry often criticizes and that Warren first proposed and helped launch after Congress passed the Dodd-Frank Act in 2010.

Warren is known for her tough questioning of bank CEOs and Trump-appointed regulators as a member of the Senate Banking Committee, and she has been one of the most vocal critics of Wells Fargo after its phony-accounts scandal in 2016. She even pressured the Fed to push out several Wells board members she said were responsible for failing to prevent the scandal.

She also publicly criticized the 17 members of her party who supported the passage of S 2155. And like Sanders, she has opposed nearly all of President Trump’s regulatory nominees.

In a plan to overhaul the CRA, Warren proposed subjecting nonbank mortgage originators to the law, though she dropped a provision that would force credit unions to comply.

Warren also wants to establish a 21st-century Glass-Steagall framework to break up the big banks and create a “wall between commercial and investment banking.”

As a senator, Warren has introduced legislation that would require mandatory penalties against credit reporting agencies when data breaches compromise consumers’ personal data.
Former New York City Mayor Michael Bloomberg
Key Speakers At The Bloomberg Global Business Forum
Michael Bloomberg, founder of Bloomberg LP, speaks during the Bloomberg Global Business Forum in New York, U.S., on Wednesday, Sept. 26, 2018. The second annual event is the only venue dedicated to convening the most important global leaders from public and private sectors to discuss and address these challenges to shared prosperity, and build crucial partnerships between business and government to ensure its continued success. Photographer: Mark Kauzlarich/Bloomberg
Mike Bloomberg surprised many in the banking industry with a fairly robust plan to tighten regulations on an industry that expected him to be the most sympathetic Democratic candidate.

His comprehensive plan for Wall Street includes reforms to strengthen the CFPB and a financial transactions tax. He calls for a merging Fannie Mae and Freddie Mac as part of a housing finance reform plan. And Bloomberg says he wants to reform anti-money-laundering rules.

Bloomberg also calls for tougher stress tests for the largest U.S. banks, and reviving the Fed’s power to judge participants on "qualitative" grounds. He would also subject systemically important nonbanks, such as insurers that have been de-designated by the Financial Stability Oversight Council, to more heightened scrutiny.

While Bloomberg’s Wall Street reforms appear relatively strict, some analysts say that his plan seemed to be aimed at quelling concerns from progressives that he is too cozy with Wall Street, and that he likely would not spend much political capital on getting it implemented if he were elected president.
Former Vice President Joe Biden
Joe Biden Holds Caucus Day Event
Former Vice President Joe Biden, 2020 Democratic presidential candidate, speaks during a campaign stop following the Nevada Democratic caucuses in Las Vegas, Nevada, U.S., on Saturday, Feb. 22, 2020. Photographer: Joe Buglewicz/Bloomberg
Former Vice President Biden is forever linked to the Dodd-Frank Act, which was the signature financial services legislation of the Obama administration and which the banking industry decried as overly burdensome. But he has also been criticized for his close ties to the credit card industry.

When he was a senator from Delaware, Biden’s single largest contributor was the credit card issuer MBNA Corp., which was later folded into Bank of America. His son, Hunter, was also employed by the firm as a lobbyist. Biden has been hit by progressives over his support for a 2005 industry-backed bill aimed at preventing consumers from abusing the bankruptcy system. Some say that bill was harmful to indebted consumers.

Biden’s campaign says he would double the funding for the Community Development Financial Institutions fund, which supports local, mission-driven financial institutions in low-income areas around the U.S. Biden is also calling to expand the Community Reinvestment Act to apply to mortgage and insurance companies, and to add a requirement for financial services institutions to provide a statement outlining their commitment to the public interest.

Biden’s campaign website says his administration would restore the CFPB fair-lending office’s authority to enforce settlements against discriminatory lenders. And he would create a new public credit reporting agency within the CFPB to provide consumers with a government option that seeks to minimize racial disparities and accept nontraditional sources of data, including rent and utility bill payment history, to establish credit.
Sen. Bernie Sanders
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Senator Bernie Sanders, an Independent from Vermont and 2020 presidential candidate, speaks during a campaign event in Las Vegas, Nevada, U.S., on Friday, Feb. 21, 2020. Roughly one-fourth of likely voters in California back Sanders, but he could walk away with as many as half of the state's delegates on Super Tuesday, a poll released Thursday shows. Photographer: Joe Buglewicz/Bloomberg
Sanders is the current front-runner in the Democratic primary and has been one of the most vocal critics of Wall Street during his tenure in Congress. For years, the Vermont senator has called for a breakup of the largest U.S. banks, reinstating Glass-Steagall and capping credit card interest rates at 15%.

Sanders has also introduced legislation that would cap a financial institution’s total exposure at 3% of the nation’s GDP, saying at the time that "the four largest financial institutions in this country are on average 80% larger than they were before we bailed them out” in the financial crisis.

He was an ardent opponent of the regulatory relief bill S 2155 in 2018, saying “at a time of massive concentration of ownership in the financial sector, now is not the time to deregulate banks that have more than $3.5 trillion in assets and lay the groundwork for another massive financial collapse.”

Sanders has also opposed nearly all of President Trump’s nominees to financial regulatory posts, including Federal Reserve Chairman Jerome Powell and Federal Deposit Insurance Corp. Chairman Jelena McWilliams, who both received strong support from Republicans and Democrats in their confirmations.