Elections bankers need to watch in 2024

Elections that bankers need to watch in 2024

December 28, 2023 8:00 AM

Biden Campaign — U.S. President Joe Biden speaks at an economic event at the Wisconsin Black Chamber of Commerce in Milwaukee on Dec. 20. While the presidential contest is the most consequential for banks next year, there are a number of down-ballot races that could also have broad implications for banking policy.

WASHINGTON — The 2024 elections are fast approaching, and the results could turn the tide in Washington when it comes to bank policy.

The presidential contest is the most consequential race next year, to be sure: The outcome could mean a new crop of regulators affecting financial policy across the board. But a number of key senators from the Banking Committee — or those with significant financial policy experience — are also going to be decided in next year's ballot.

Senate Banking Committee Chairman Sen. Sherrod Brown, D-Ohio, faces a difficult reelection campaign back home in an increasingly red state, and Sen. Jon Tester, D-Mont., similarly has to win in his rural western state, a test to how his moderate and independent attitudes on economic and banking issues will hold up.

Democrats in banking have a little more to look forward to in California, where Rep. Katie Porter — a financial protection academic and protege of Senator Elizabeth Warren, D-Mass. — is an early favorite to fill the seat left by the late Sen. Dianne Feinstein.

Here's four important races for bankers to keep tabs on this election season:

The Presidential race

President Joe Biden is running for reelection, likely up against former President Donald Trump in a rematch of the 2020 race.

Another Biden victory would mean that his regulators have more time to continue pursuing the same agenda: tighter capital requirements for banks, an emphasis on consumer protection and enforcement and continued scrutiny on mergers and more robust antitrust laws.

A Trump win, meanwhile, would likely mean that the new administration picks back up where it left off in 2020. At the time, Trump appointees sought to weaken the powers of the Consumer Financial Protection Bureau and open doors for fintechs and their partnerships with banks, via rules and guidance at the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.

Expect so-called "junk fees" to make an appearance on the campaign trail. Biden has made a number of speeches on the topic, even giving it mentions in his State of the Union address, and trumpeting CFPB Director Rohit Chopra's work at the bureau.

Ohio Senate

Senate Banking Committee Chairman Sherrod Brown is seeking his fourth term in office.

It's one of three Democratic-held senate seats up for election in 2024, and is happening in a state where former President Donald Trump won in both 2016 and 2020.

In the Senate Banking Committee, Brown has been known to work across the aisle with his Ohio colleague, Sen. J.D. Vance, on measures that are meant to bring accountability to banks. Some of his biggest initiatives include a bill that would make it easier for the Federal Deposit Insurance Corp. to claw back the compensation of failed bank executives, and led a number of committee hearings focused on scrutinizing regulators and executives following the collapse of Silicon Valley Bank and other large regional institutions.

He's also confirmed nearly a full slate of President Joe Biden's nominees to key financial regulation positions, including Consumer Financial Protection Bureau Director Rohit Chopra and Federal Reserve Vice Chair for Supervision Michael Barr.

Despite a relatively long tenure atop of the Senate Banking Committee, Brown has passed relatively little legislation to the full Senate. He held his first markup, which focused on the clawback legislation, in the summer of 2023.

California Senate

Rep. Katie Porter, D-Calif., will vie for the Senate seat of the late Sen. Dianne Feinstein, a potential big win for progressive lawmakers on financial issues in the Senate.

Porter, a consumer finance attorney by trade, until this last Congress served on the House Financial Services Committee. She studied at Harvard under Sen. Elizabeth Warren, D-Mass., and has worked on legislation with her across chambers during her time in Washington.

Porter currently trails Rep. Adam Schiff, who is also running for the seat, but could pick up more of the vote should she beat out fellow progressive Barbara Lee. Schiff is also outpacing Porter and Lee in his campaign funding.

Montana Senate

Sen. Jon Tester, D-Mont., faces a similarly tough reelection to fellow Senate Banking Committee member Sen. Sherrod Brown.

Montana is also increasingly Republican since the last time Tester won an election there, with former President Donald Trump garnering 56.92% of the vote in 2020.

Tester, historically, has been one of the Senate's most successful fundraisers, helped at least in part by his moderate stance on most financial issues on the banking panel. He joined other moderates, for example, in questioning the impact of the Basel III endgame proposal on small businesses in Montana during a committee hearing with regulators in November.

"These rules don't affect any banks in Montana, but they do affect the big guys that affect Montana," he said. "From a small-business standpoint, if this rule doesn't work, it's gonna raise hell with the economy of my state."