11 Policymakers to Watch in 2016
January 4, 2016 11:00 AM
The presidential race is likely to overshadow most political events in 2016 as the first primary states begin voting in February. Accordingly, many of the people on this list are candidates who could win the presidency in November, or at least have the chance to shape the outcome. But there are also some guaranteed players already in place whose actions will help shape banking policy in the year to come. Here are the top 10 to watch.
President Obama
The president almost doesn't make the list this year because his status as a lame duck in a second term undercuts the idea that he will push for any significant reforms of the banking sector. Yet he remains a key figure that could decide to cut a deal on banking reforms as his term winds to an end. While he's unlikely to do anything that will undercut his legacy items, including the formation of the Consumer Financial Protection Bureau, he could be willing to give ground in other areas, such as the level at which banks face enhanced capital and liquidity requirements.
Paul Ryan
Speaker of the House Paul Ryan hasn't had the chance to focus on banking issues during his short tenure to date, but that could change in 2016. The Wisconsin Republican is more conservative than his predecessor, John Boehner, and is closer to House Financial Services Committee Chairman Jeb Hensarling. Ryan has called for restrictions on Title I of the Dodd-Frank Act, which give regulators the power to take down a failing large bank, and other changes to the financial reform law. While he could help these priorities take center stage in the House, he might also resurrect Hensarling's controversial bill to privatize Fannie Mae and Freddie Mac.
Ted Cruz
The freshman Texas Republican has rocketed into second place of most polls for Republican presidential candidates, giving him momentum in 2016 as the primary votes begin to take place. Cruz's views on banking are a mixed bag for financial executives. While he wants to abolish the Consumer Financial Protection Bureau, a position many bankers support, his desire to audit the Federal Reserve Board may not sit as well. Still, like other Republicans, Cruz has been very critical of Dodd-Frank, warning it is wiping out small banks. If he wins the presidency an uphill battle given Cruz's extreme positions on many issues he could push for many reforms bankers desire.
Mel Watt
While Congress has stalled on housing finance reform, Federal Housing Finance Agency Director Mel Watt has quietly continued his agency's mission to enact stealth reform of the government-sponsored enterprises. Fannie Mae and Freddie Mac are taking on more risk-sharing deals and moving towards a common securitization platform, both of which paves the way for the firms to transition to a new system. The FHFA's actions in 2016 will continue to be critical ahead of a presidential election that may spark more Congressional interest in GSE reform in 2017 and beyond.
Richard Shelby
Senate Banking Committee Chairman Richard Shelby has exactly one more year to finish any legacy-building work he'd like to accomplish in the financial services arena, as Republican rules will force him to give up his chairmanship at yearend regardless of which party controls the chamber. The question remains: what will the Alabama Republican do with that year? He's widely expected to make another run at passing regulatory relief, and some wonder if he might try to be more ambitious and also tackle housing finance reform.
Donald Trump
Few people, perhaps not even Donald Trump himself, would have expected the billionaire real estate tycoon to be on this list. For the most part, Trump isn't that interested in banking policy, even as a Republican candidate for president. But as the front-runner in the GOP race, that could change if he succeeds in becoming the nominee, when he would likely be forced to offer more details on his views. Even if Trump doesn't win the nomination, he could run as a third-party candidate for president, almost certainly spoiling banker hopes of a Republican presidency. (Trump has pledged not to run as a third party candidate, but that may not stop him if he feels sabotaged by the Republican establishment.)
Marco Rubio
The Florida senator may be the last, best hope for the Republican establishment in the GOP race for president. While Donald Trump and Sen. Ted Cruz are widely disliked by the establishment, the young and charismatic Rubio is seen as a rising star who has the potential to best likely Democratic nominee Hillary Clinton. Rubio's views on banking are also in line with what bankers want to see. Specifically, he favors repealing Dodd-Frank and curbing the cost of financial regulation.
Hillary Clinton
The Democratic presidential frontrunner has already outlined a Wall Street reform plan. But if she succeeds in winning the nomination, she will likely offer more specifics as the final election approaches in November. While any policy pronouncements wouldn't affect bankers until 2017 at the earliest, the former Secretary of State and senator from New York is still well worth watching to see how a second Clinton administration may treat the financial industry.
Dan Tarullo
Fed Gov. Daniel Tarullo has been the Fed's go-to person on banking supervision since 2009, but his days of being in charge of that arena may be numbered. Though his term lasts for several more years, a future administration whether Democratic or Republican could opt to finally nominate a vice chairman of banking supervision, a job created in Dodd-Frank, but which has been left vacant. Accordingly, 2016 could be Tarullo's last chance to implement any remaining reforms. (Of course, a new administration could always nominate Tarullo for the job or not move to fill the vice chair slot immediately, giving Tarullo more time to act.)
Elizabeth Warren
As she has since winning her Senate seat in 2012, Sen. Elizabeth Warren remains one of the most-watched lawmakers by the financial industry. Many bankers see the Massachusetts Democrat as the reason why Congress did not pass regulatory relief legislation this year. Warren raised concerns early on that the bill was being used as a cover to ease restrictions on the big banks and even questioned the need for relief at all, citing small bank profits. In 2016, she could continue to make or break the chances for legislation.
Richard Cordray
The head of the Consumer Financial Protection Bureau remains one of the most powerful regulators in D.C. The agency is poised to issue new rules governing payday loans and debt collection practices as well as reshape the financial sector though enforcement actions. Mortgage lenders will be anxiously watching to see how, for example, the agency tackles violations of its new disclosure rules.
