WASHINGTON (Reuters) – Many Wall Street banks’ favorite lawmakers were returned to Congress overnight, boding well for the industry which has been trying to rebuild a broad base of bipartisan support a decade after the financial crisis tarnished its image in Washington.
While the outcome of the presidential election and some Congressional races remained unclear on Wednesday, the composition of key banking committees in the House of Representatives and Senate should remain largely intact, ensuring some continuity for the industry in the next Congress.
These committees take the lead on financial services legislation, oversee top U.S. financial regulators, and can investigate the industry. Their members range from industry allies to outspoken adversaries.
All members of the Democrat-led House Financial Services Committee were up for re-election. Committee chair Maxine Waters easily won, as did Rep. Patrick McHenry, who is expected to resume his role as the top Republican on the panel.
Though often a bank critic, Waters is seen by the industry as a pragmatist who is willing to work across the aisle.
Other members of the House panel who won reelection with the help of industry backing include Republicans Andy Barr, French Hill, Ted Budd and moderate New Jersey Democrat Josh Gottheimer.
Republicans, after successfully fending off Democratic challengers in several close races, looked poised to narrowly retain control of the Senate. That would dash Democratic hopes of swiftly enacting legislation to rescind some of President Donald Trump’s finance-friendly rule changes.
It would also likely hand leadership of the Senate’s banking panel to Pennsylvania Senator Pat Toomey, a free-market Republican who would oppose progressive agency picks should Democrat Joe Biden take the White House, said analysts.
“Overall, a GOP Senate could force Biden to name cabinet secretaries and regulators who are more pragmatic rather than progressive. We would see that as a positive trend that would represent less risk to banks,” said Jaret Seiberg, an analyst at Cowen Washington Research Group.
Four Democrats and six Republicans on the panel were up for re-relection, four in tough races. Thom Tillis, an industry ally and top recipient of banking industry cash among Senate Republicans, was leading in a race too close to call Wednesday morning, as was Senator David Perdue, another Republican bank ally.
Democratic Senator Mark Warner, a senior moderate who backed legislation easing small bank rules in 2018, won his race.
REBUILDING THE CENTER
The banking industry has backed moderates in both parties, trying over the past two years to rebuild the bipartisan support it enjoyed in Congress before the financial crisis and 2008 bailout turned many Democrats against it.
For example, the American Bankers Association (ABA), the largest U.S. bank group, began running independent ads supporting lawmakers for the first time during the 2018 mid-terms, and backed 14 candidates during the 2020 campaign.
They included Gottheimer, Hill, Tillis, Budd and Barr, as well as Republican Senator Cory Gardner, who has backed an industry campaign to make it possible for banks to service cannabis-related companies in states where the drug is legal. Gardner lost his reelection bid in Colorado to Democrat John Hickenlooper.
The ABA also ran ads backing Rep. Greg Stanton, an Arizona Democrat who won his race and is seen by Washington insiders as another business-friendly lawmaker. Stanton also received an endorsement from the U.S. Chamber of Commerce, the nation’s largest business lobby.
“In this election year, we continued to expand our political engagement on behalf of candidates in both parties who understand and appreciate the critical role banks of all sizes play in the economy and in their communities,” said Rob Engstrom, the group’s chief political strategist.
Industry campaign donations have also grown more bipartisan, according to data from the Center for Responsive Politics.
In the 2020 election cycle, campaign contributions from commercial banks and their workers to Republicans and Democrats running in congressional races are split nearly evenly, at $14 million and $13.6 million respectively.
That is a significant shift from four years ago, when Republicans pulled in $18.9 million from the industry, nearly twice as much as Democrats.
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(Reporting by Pete Schroeder; Editing by Michelle Price and David Gregorio)