By Michelle Price
WASHINGTON – Wall Street may face an uncomfortable four years after President-elect Joe Biden’s team on Monday confirmed plans to appoint two consumer masters to head the top financial agencies, signaling a tougher stance on the industry, than many had expected.
Gary Gensler will chair the Securities and Exchange Commission (SEC), and Federal Trade Commission member Rohit Chopra will head the Consumer Financial Protection Bureau (CFPB). Progressives see agencies as critical to promoting policy priorities on climate change and social justice.
Wall Street-friendly Republicans on Monday criticized Biden for bowing to leftists and warned that the election would be divisive.
“The Biden team is pandering to members of the far left,” said Patrick McHenry, leader of the Republican House Reputation Panel on Chopra, warning Gensler to “resist pressure to command our securities disclosure system to try not to fix it” – economic or social problems. “
Chairman of the derivatives regulator from 2009 to 2014, Gensler implemented new swaps trading rules created by Congress after the financial crisis and developed a reputation as a tough operator willing to stand up to powerful Wall Street interests.
Chopra helped set up the CFPB after the crisis and served as its first ombudsman for student loans. In the FTC, he fought for stricter rules for large technology companies on consumer privacy and competition and for stricter enforcement penalties.
DEMOCRATS IN CONTROL
As Republicans appear to have a good chance of maintaining control of the Senate after the Nov. 3 election, economic leaders had hoped Biden would pursue more moderate elections. But Democratic victories in two Georgia elections earlier this month mean Democrats will have effective control of the chamber when Biden and elected Vice President Kamala Harris are sworn in on Wednesday.
These victories also mean anti-Wall Street fire Sherrod Brown will head the powerful Senate Banking Committee. He has said he plans to try to repeal Wall Street-friendly rules imposed by President Donald Trump’s regulators.
On Monday, Brown hailed Chopra as a “bold” choice that would ensure that the CFPB “plays a leading role in combating racial inequalities in our financial system,” while Gensler “holds bad actors accountable” and puts “working families first.” “
Gensler is expected to pursue new business information on climate change-related risks, policy spending and the composition and treatment of the company’s workforce, and to implement compensation edges for managers after the crisis, among other rules.
Chopra is expected to review the rules on wage lending and debt collection, which influential consumer groups say they do not want to protect Americans. They also hope he will eradicate exorbitant lending rates and violent debt collection practices, tackle student debt burdens and gaps in minority access to credit.
“The CFPB has an incredibly important job to do, including stopping economic rip-offs,” said Lisa Donner, CEO of Americans for Financial Reform, a think tank. “It also has an urgent role to play in helping families survive and recover from the pandemic-induced economic crisis.”
Biden, however, will first have to fire Kathy Kraninger, the current CFPB director, a power he will have thanks to a ruling last year by the Supreme Court that said the CFPB director served according to the president’s will.
But Richard Hunt, executive director of the Consumer Bankers Association, rejected the idea that Biden should automatically use that power.
“The CBA does not believe it is in the interest of consumers to have a new director with each change in administration. This whiplash effect will stifle innovation and prevent uniform rules,” Hunt said in a normally powerful statement.