And community banking survived, mostly unhurt.
By Bill Poquette
If you’re not totally burned out on the midterm elections yet, read on for some observations about implications for the banking industry.
First and most importantly, prospects appear slim for any significant new banking legislation. The bad news is don’t expect more regulatory relief from Congress; the good news is there should be no more piling on of excessive regulation by the lawmakers.
Unfortunately, the industry lost some congressional allies from both parties through retirements and election misfortunes. Sen. Dean Heller, R-Nev., a Banking Committee member, was defeated by Rep. Jacky Rosen, D-Nev., who has been serving on the House Ways and Means Committee. Sens. Heidi Heitcamp, D-N.D., and Joe Donnelly, D-Ind., both supporters of S.2155, were defeated for re-election. Sens. Claire McCaskill of Missouri and Bill Nelson of Florida, Democratic allies on S.2155 but not Banking Committee members, were sent home by voters as well. On the other hand, Sen. Jon Tester, D-Mont., won re-election to become the only surviving Democratic supporter of S.2155.
A major loss in the House, of course, is Rep. Jeb Hensarling, R-Texas, chairman of the House Financial Services Committee. He will most likely be succeeded by Rep. Maxine Waters, D-Calif., who by all accounts is no friend of banking. She will keep trying to block what she sees as the disarming of the Bureau of Consumer Financial Protection by the Trump administration, and champions breaking up the biggest banks. Campaigning for ranking member of the committee is Rep. Patrick McHenry, R-N.C.
In what could be a plus for the industry in the Senate, Rep. Kyrsten Sinema, D-Ariz., a member of the House Financial Services Committee who voted for S.2155, will replace retiring Sen. Jeff Flake. She also backed Rep. Blaine Leutkemeier, R-Mo., on his bill to eliminate the asset threshold for systemically important financial institutions.
And in what was a first in my memory, during the campaign the American Bankers Association publicly announced a list of incumbent candidates for whom it was providing advertising support. Similarly, the Credit Union National Association went public with names and contribution amounts for candidates it endorsed.
Of 10 candidates publicly backed by the ABA, four lost bids for re-election: Rep. Jeff Denham, R-Calif.; Rep. Carlos Curbelo, R-Fla.; Rep. Bruce Poliquin, R-Maine, a Financial Services Committee member; and Sen. Dean Heller, R-Nev., a Banking Committee member. Three ABA-backed Financial Services Committee members survived re-election: Rep. Andy Barr, R-Ky., Rep. Vicente Gonzales, D-Texas; and Rep. French Hill, R-Ark.
While Waters has been called bankers’ “worst nightmare” as Financial Services chair, most observers believe a divided Congress will provide damage control.
Prospects are dim, then, for further regulatory relief from Congress, but the regulators will continue tailoring rules and regulations as mandated by S.2155 — amid prodding by its architect, Senate Banking Committee Chairman Mike Crapo, R-Idaho.
All in all, the banking industry fared reasonably well in the midterms. The results speak well of the ABA’s advertising and PAC support, as well as that of the Independent Community Bankers of America, all the state associations and, most of all, the advocacy efforts of thousands of community bankers.
Bill Poquette is Editor-in-Chief, firstname.lastname@example.org.