President-elect Joe Biden has picked up a pair of veteran veterans backed by progressive Democrats to lead two major Wall Street watchdogs, indicating that his administration is undergoing four years of light-hearted policies under President Donald Trump’s appointment The latter is planning a rigorous inspection.
Former Commodity Futures Trading Commission chairman Gary Gensler will be nominated to lead Securities and Exchange Commission and Federal Trade Commission member Rohit Chopra is being tapped to lead Consumer Financial Security Bureau, according to people familiar with the decision.
The elections seek to see a sharp departure from trade-friendly policies advanced during the Trump administration after weeks of conflict over financial regulation positions between liberal Democrats and the party’s left parties. They are bad news for the banking industry, which has been prepared for the possibility of stricter regulations since Biden was elected in November.
63-year-old Gensler belongs to East Goldman Sachs Group Inc. partner, who gained fame as Wall Street when he engaged in battles advancing derivatives regulation at the CFTC during the Obama administration. Chopra, 38, is an acolyte of Senator Elizabeth Warren of Massachusetts who helped him establish the CFPB before going to office.
Both nominations will be subject to Senate confirmation, and the SEC and the CFPB are likely to be under interim leaders until the process is completed.
The Democrats who won two Senate runoff elections in Georgia in this month were greatly helped in the confirmation of Gensler and Chopra’s win, resulting in a 50-50 split. The incoming vice president, Kamala Harris, will hold a tie-breaking vote should all Republicans oppose Biden’s financial oversight. This could nullify any attempt by the powerful banking lobby to block Gensler and Chopra, whose nominations will go before the Fighter Banking Committee.
If confirmed, Gensler would take charge of an agency that some Democrats say has become too comfortable with the banking industry. It will need to immediately address the disruption of the market resulting from the coronovirus epidemic and the growing US quarrel with China over public company audits.
Democrats would be expected to push Gensler to strict enforcement and large fines on charges of wrongdoing by financial firms and officials. He will face political spending, climate-change risks and pressure to push companies forward to disclose diversity and inclusion.
Progressive people will be looking for Chopra to reinvigorate the CFPB by saying that he has become a toothless version of the agency he helped create Warren. In his first term at the agency, he served as his student loan ombudsman. That experience can come in handy if it is to make good on Biden’s promise to clamp down on private lenders that mislead student borrowers.
The Warren-aligned Progressive Transformation Campaign Committee said Chopra’s selection was “a major victory for consumers and a sign that executive power will be used to achieve tangible results for the American people.”
– with assistance by Robert Schmidt
()Updates with Senate confirmation opportunities starting in the sixth paragraph)