What Harris' potential VP picks have to say about banking

August 5, 2024 1:27 PM

WASHINGTON — With just two weeks to go before the Democratic National Convention in Chicago, Vice President Kamala Harris is reportedly narrowing the field on her vice presidential pick.

Harris — who is scheduled to appear with her running mate Tuesday afternoon at a rally in Philadelphia — is expected to choose a white, male moderate who might quell misgivings among swing voters. Some at the top of the field are governors of swing states or Democratic governors who outperformed the Biden-Harris ticket in 2020.

Harris herself has a long record of fighting with bankers during her time as attorney general in California, although she didn't pass any significant banking legislation during her four years in the Senate. However, as California's attorney general, Harris negotiated with JPMorgan Chase and other banks to settle mortgage issues in the wake of the 2008 financial crisis on behalf of homeowners in the state.

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Vice presidents don't necessarily shape policy; the first vice president, John Adams, famously called the vice presidency "the most insignificant office that ever the invention of man contrived or his imagination conceived." But some presidents rely on their vice presidents quite a bit in shaping policy and taking charge of important priorities, most notably Vice President Dick Cheney during the George W. Bush administration and Vice President Joe Biden during Barack Obama's presidency.

Who Harris picks — and what they think about bank policy — could be an important indicator of how the administration might approach significant banking issues.

Here's what each of the likely final vice presidential candidates for the Democratic ticket have said and done when it comes to banking and financial policy issues during their tenures, appearing in alphabetical order:

Sen. Mark Kelly

Sen. Mark Kelly, a moderate from Arizona, doesn't sit on any finance or banking related committees.

He has, however, broken with his party on a critical financial issue in Congress: Crypto banking. He was one of 11 Democrats, including Senate Majority Leader Chuck Schumer, to vote in favor of a Congressional Review Act resolution that would have nullified a measure from the Securities and Exchange Commission that undercuts banks' ability to custody crypto assets.

The SEC resolution, called SAB 121, directs companies to mark digital assets as liabilities on their balance sheets. Banks and other opponents of the accounting bulletin have said that the SEC should have gone through a full rulemaking process. President Joe Biden ultimately vetoed the CRA resolution.

Kelly was also on a long list of cosponsors of the SAFE Banking Act, which would have made it easier for legal marijuana businesses to receive banking services. The American Bankers Association joined the Arizona Bankers Association in releasing a campaign ad praising Kelly's work on that topic in 2022.

In the immediate aftermath of the Silicon Valley Bank failure last year, Kelly said that Congress might need to look at "how to prevent this from occurring again while maintaining confidence in our banking system." He said that the SVB failure would have affected the "many" tech companies with employees and contractors in Arizona — a state that, alongside California and Texas, has become a tech hub.

Efforts to pass any legislation in Congress in response to the crisis, however, quickly stalled.

Pennsylvania Gov. Josh Shapiro

Josh Shapiro, the governor of Pennsylvania — a key swing state this election — has a long history of interactions with Wall Street and bankers.

He's another former attorney general in a state that boasts some of the largest regional banks in the country, including PNC Financial Services and FNB Corp. Notably, during his time as attorney general, he led a multistate lawsuit against Mariner Finance, a unit of Warburg Pincus, alleging that it violated several consumer finance laws.

He avoided commenting on another Pennsylvania law that never made it to his desk: a swipe-fee bill similar to the one in Illinois that roiled banking groups in the state. The bill would have barred interchange fees from applying to sales tax when retailers accept credit card or debit cards. In Illinois, bankers argued that the bill would have a myriad of unintended consequences, including forcing credit card companies to create entirely new systems to route payments.

Minnesota Gov. Tim Walz

Gov. Tim Walz of Minnesota has signed a number of bills and overseen programs that matter to bankers.

Touted as a progressive policy lab, Minnesota has passed several progressive legislative priorities, including on financial policy. Walz signed a measure in 2023, for example, capping annual interest rates on payday loans at 36% in the state.

Walz also signed a fee transparency law, playing into a larger Democratic policy point over so-called "junk fees." The law requires ticket sellers to tell customers in the state the total price of admission for events beginning in 2025.

The state has also had its shares of troubles when it comes to financial and bank policy.

The state, according to federal prosecutors, was home to the biggest pandemic fraud case in the country, with dozens of people facing federal charges for defrauding the government of an estimated $250 million. Walz and the state have denied culpability in the case, which involves the nonprofit Feeding Our Future allegedly faking claims seeking reimbursements for meals.

"There's not a single state employee that was implicated in doing anything that was illegal. They simply didn't do as much due diligence as they should have," Walz said in a statement. "So, there's been leadership changes in these organizations since that time, and we have new leadership ... certainly over at the Department of Education."