6 congressional races for bankers to watch in 2022

WASHINGTON — Congress could be poised for a legislative shakeup in financial policy after the 2022 midterms, with key Democratic lawmakers on the House and Senate banking committees facing tough re-election contests and Republicans retiring in significant numbers.

For congressional Democrats nationwide, the electoral prospects in 2022 already appear somewhat dire. Midterm elections after the election of a new president are often unkind to the party in power, and recent polls put the GOP ahead of Democrats on a generic ballot for the first time since 2014.

But a large number of Republicans who sit on the financial committees are headed to the exit rather than running again in 2022, including Sen. Pat Toomey, R-Pa., who is the ranking member on the Senate Banking Committee.

The U.S. Capitol Dome looms at sunset. Bloomberg.

Outside of Toomey, much of the leadership across the financial committees is expected to stick around: Senate Banking Chair Sherrod Brown, D-Ohio, isn’t up for reelection until 2024, while Chair Maxine Waters, D-Calif. and Ranking Member Patrick McHenry, R-N.C., of the House Financial Services Committee are both considered to have safe seats heading into 2022.

But in the meantime, the members those leaders will rely on to usher in their legislative agenda — or quash their opposition — could be posed for significant churn.

What follows are six congressional contests bankers should watch closely in the months between now and November.

Sen. Raphael Warnock, D-Ga.

One of the two candidates who helped secure Democratic control of the U.S. Senate in early 2021, Sen. Raphael Warnock, D-Ga., is in the midst of a brutal reelection campaign a little more than a year since taking office. To hold his seat on the Senate Banking Committee, he’ll likely have to beat back a general election challenge from Republican Hershel Walker, a former professional football player with the endorsement of former President Donald Trump.

Warnock defeated his last opponent with a 2% margin in the fiercely contested Georgia elections in 2020. Walker must still secure the Republican nomination as primary voters head into voting booths this month — he currently leads the GOP primary field by nearly 50 percentage points over his closest rival — and early polls suggest Walker may also have a slight advantage over Warnock in the general election.

Warnock’s short time on the Senate Banking Committee has been an active one: Since being sworn in, the pastor has pushed for the elimination of overdraft fees, chaired subcommittee hearings on the rise of consumer scams during the pandemic, pushed for a law that would allocate $100 billion in down payment funds for first-time homebuyers, and pushed for a stronger reform of the Community Reinvestment Act.

Sen. Catherine Cortez Masto, D-Nev.

The country’s first Latina senator is expected to win her primary, but she’ll likely face off against the Donald Trump-backed Adam Laxalt in the general election.

Sen. Catherine Cortez Masto, D-Nev., won her seat in 2016 amid record outside spending, filling the chair of Sen. Harry Reid, a Democrat who played a major role in passing Dodd-Frank before retiring after three decades in the Senate. Nevada is once again at the center of a spending war between Republicans and Democrats, with Cortez Masto raising nearly three times the amount of cash compared to her rival, reaching what her campaign said is a record $4.4 million in the first three months of 2022 for the state, in what’s expected to be a contentious race.

On the Senate Banking Committee, Cortez Masto has been particularly active on housing and other consumer-facing issues. She sponsored a bipartisan bill with Tim Scott, R-S.C., that would amend the Federal Credit Union Act to raise maturity limits for nonmortgage loans at federal credit unions from 15 years to 20 years, and has pressed financial regulators on Community Reinvestment Act reform on multiple occasions. She’s also sponsored bipartisan legislation to revamp anti-money-laundering laws.

Rep. Carolyn Maloney, D-N.Y.

The latest round of progressive primary challengers to Rep. Carolyn Maloney, D-N.Y., could cost one of the most senior members of the House Financial Services Committee her seat, but a redrawn congressional map and split field of candidates could boost her chances of hanging on.

Maloney, who has served in Congress since 1993 in a solidly Democratic district, has faced three primary challenges in the past three election cycles. The most recent, led by the progressive Suraj Patel in 2020, fell just 3,496 votes short of unseating Maloney, who also chairs the House Oversight Committee. For the 2022 election, the longtime fixture of New York politics will again face Patel as well as Rana Abdelhamid, a democratic socialist with the backing of Justice Democrats.

After the state of New York lost a seat in the House of Representatives following the 2020 U.S. census, the new congressional map drawn up by Democrats could have gifted the party as many as three new seats in the upcoming midterm, and Maloney’s redone district — the New York 12th — was expected to give her an edge over her opponents. But after the state’s Court of Appeals tossed that map last week, it remains to be seen whether the party will be able to use it by the time the now-delayed primaries commence in August.

In financial policy circles, Rep. Maloney is known best for her advocacy of the Corporate Transparency Act, a bill passed into law in 2020 that is expected to bolster American oversight of illicit finance and money laundering while simultaneously relieving banks of some regulatory burden — though it remains to be seen just how the law will be implemented.

Rep. Josh Gottheimer, D-N.J.

Rep. Josh Gottheimer, D-N.J., has held on to one of New Jersey’s few swing districts since winning the district, consisting of New York City suburbs and some surrounding rural areas, in 2016.

While Gottheimer doesn’t have any primary opponents, despite fending off progressive challengers last cycle, he’ll likely again face a competitive general election. The state’s new congressional map means the district should lean more Democratic in this election, but a red wave could change that calculus. Gottheimer is on the GOP campaign arm list of “vulnerable” Democrats in the upcoming midterms.

The frontrunner to be his Republican opponent is Nick De Gregorio, a former Marine who’s been the most successful fundraiser of the Republican pool so far.

In Washington, Gottheimer has angered progressives for lack of enthusiastic support for some of President Biden’s economic policies. On the House Financial Services Committee, he’s been an active voice on crypto and fintech issues, and currently serves as the vice chair of the national security subcommittee. Notably, Gottheimer recently spearheaded draft legislation that would establish the first federal rules and prudential backstops for stablecoins.

In a statement provided to American Banker, Gottheimer said he was "focused on fighting for the families of the Fifth District — working with Democrats and Republicans to lower taxes and gas prices, invest in law enforcement, and make prescription drugs more affordable," adding that he would use his position on the House committee to "to ensure that our businesses and jobs can stay in New Jersey and grow here and keep providing jobs our families rely on."

Rep. Bill Foster, D-Ill.

A member of the House Financial Services Committee whose current tenure dates back to 2013, Rep. Bill Foster is expected to face one of the most competitive general elections of his career in 2022.

Foster, a particle physicist and former businessman who currently chairs a task force on artificial intelligence under the House Financial Services Committee, was placed on the Democratic Congressional Campaign Committee’s list of “frontline” lawmakers in January — a group of Democratic candidates expected to face tight contests this year.

Foster represents a pocket of the southwest Chicago suburbs, a district is rated by the Cook Political Report as a “likely” Democratic hold with room for an upset, and his GOP competitors have mounted a solid fundraising effort — including Republican Catalina Lauf, who originally set out to defeat Rep. Adam Kinzinger, R-Ill., before that seat was eliminated by the Illinois redistricting process.

Foster’s unusually technical background for a lawmaker has put him at the center of financial technology policy in Congress. Beyond the task force on artificial intelligence, he also co-chairs the Congressional Blockchain Caucus. Foster has frequently stressed the importance of digital identity in and around the crypto sector and, just last week, grilled the acting director of the Financial Crimes Enforcement Network on whether the federal government was “equipped” to identify the owners of certain kinds of digital asset wallets.

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Representative Sean Casten, a Democrat from Illinois, speaks during an "End The Filibuster" news conference outside the U.S. Capitol. Photographer: Stefani Reynolds/Bloomberg

Rep. Sean Casten D-Ill.

When state lawmakers redrew Illinois congressional boundaries, it pitted Democrat U.S. Reps. Marie Newman and Sean Casten against each other in the upcoming primary. Casten has been in the House longer than Newman, and he’s a member of the House Financial Services Committee.

Under the new congressional map, Newman’s home actually falls in the district of another House Financial Services Committee member, Rep. Jesús “Chuy” García, where analysts expected she would struggle to overcome García’s deep ties to the Latino community.

Now, Newman and Casten will vie for the suburban district near Chicago, and they are already locked in a contentious race. Casten has called on Newman to release details of a secret agreement she made with a man named Iymen Chehade (who’s now running in a separate district) who accused her of promising him a job if he held back from running against her in 2020. The deal between Newman and Chehade is now the subject of a House Ethics Committee probe.

In Congress, Casten’s notable work on the financial side has largely focused on climate. He introduced the Climate Risk Disclosure Act alongside Sen. Elizabeth Warren, D-Mass., and companion legislation to a bill from Sen. Brian Schatz, D-Hawaii, that would require the Federal Reserve to study and manage climate-related risks to the financial system.

In a statement, campaign spokesperson Jacob Vurpillat said the Illinois representative was “committed to fighting to build a brighter, more sustainable future. Since taking office, he has introduced and co-sponsored legislation in support of clean energy, women’s rights, protections for seniors, and universal health care, among other critically important issues.”

Key Republicans head for the exits

Although few key Republicans on the House and Senate’s banking committees appear to be facing tough reelection campaigns, more than a few are retiring, and their replacements could be consequential for national and financial policy alike.

Sen. Pat Toomey, R-Pa., will leave a considerable hole among the GOP ranks of the Senate Banking Committee, where he currently serves as ranking member. Toomey has been a top advocate for the banking industry as well as oil and gas firms, and the lawmaker has also urged a light-touch approach to regulating the crypto sector. Likewise, Sen. Rob Portman, R-Ohio, who serves on the Senate Finance Committee, will depart Congress as one of the body’s top advocates for the crypto sector.

Since announcing their retirements, the races to replace Portman and Toomey in the Senate have emerged as some of the nation’s most closely watched, with primaries in Ohio and Pennsylvania attracting tens of millions in campaign dollars. And the general elections are expected to be fiercely competitive as both political parties vie for control of the 50-50 Senate in two swing states; Republicans have a slight edge in Ohio, while Pennsylvania’s Senate contest is expected to be a toss-up, according to the Cook Political Report.

Meanwhile, several Republican members of the House Financial Services Committee will be retiring after the current session of Congress, among them Reps. Van Taylor of Texas; Trey Hollingsworth of Indiana; Anthony Gonzalez of Ohio; Ted Budd of North Carolina; and Lee Zeldin of New York. Together, those lawmakers will constitute more than 20% of the committee's GOP representation.