Will Crapo Take Over as Banking Panel's Top Republican?

WASHINGTON — Sen. Richard Shelby is not up for reelection this year, but his days as top Republican on the Senate Banking Committee may be numbered.

While much about the next Congress is still undecided ahead of the November elections, Shelby will run up against GOP conference rules unless Republicans seize control of the chamber. Those rules prohibit a member from serving as a committee's ranking member or chairman for more than six years.

If Republicans win enough seats to secure the chamber — a possible but unlikely scenario — Shelby still has two more years to serve as chairman. But he is ending his sixth year as the panel's minority leader now, meaning he would likely have to give up his ranking member spot.

That would open the door for Sen. Mike Crapo of Idaho, who is next in line according to seniority. While Crapo has generally been supportive of Shelby's leadership, the change could still be significant for the committee and its priorities.

"There's a style difference — Crapo's a little bit more low-key," said Brian Gardner, a research analyst with Keefe, Bruyette & Woods. "Shelby, as a lot of Southerners do, has a populist streak. I don't think of Crapo quite in the same terms of populism."

Such differences could also play into how Crapo works with current Chairman Tim Johnson, D-S.C.

"I would expect that Johnson and Crapo would get along. They both represent small-bank states," said Gardner. "Both are probably close with community banks, so it's probably a positive for the community banks.

"Both he and Johnson represent states where agriculture and ranching are significant parts of the economy. So I think there's probably a common bond there," he added.

The two have also worked together on rural investment and other bills, observers point out.

"I think that Crapo would push Johnson less. Maybe it's a matter of degree, but you're not going to see as much of a confrontation," said Mark Calabria, director of financial regulation studies at the Cato Institute, and a former top Shelby aide.

But at the same time, Crapo will need to reach out to the more conservative GOP committee members, including Sens. Jim DeMint, R-S.C., and Patrick Toomey, R-Penn.

"You're going to have to build a bridge to many of the more conservative members of the committee," said Calabria. "I think that's going to be the wildcard."

That's a skill his predecessor was able to hone and use to his advantage.

"Shelby has a long history on that committee as ranking member or chairman, and he was able to keep Republicans united for a long time," said Gardner. "I suspect that Crapo would be able to do that, but it's a talent that's developed over time."

"He would have to show himself as a skilled legislator and negotiator and earn the trust and loyalty of the committee," he added. "It would be a bit of a feeling out process just to determine how united Republicans would remain."

Earning that trust will require a lot of time "behind the scenes" with GOP committee members, according to Calabria.

"One of the directions he could go is to have more engagement among subcommittees, and give members more of a run with the issues," he added. "It's also going to involve spending one-on-one time personally with members to let them know where you are coming from and let them know you're listening to them."

Working in his favor, however is Crapo's long history of voting with the party on some of the most pivotal banking issues of the last few years. He joined the committee when he was elected to the Senate in 1999.

"He's been on during the most consequential period of time for the committee. With the Dodd-Frank legislation and coming out of the financial crisis — it's just really great experience with all of the very big issues in the financial services space," said Tony Fratto, a partner at Hamilton Place Strategies and former Bush administration official.

Crapo voted against the Troubled Asset Relief Program and against cloture on the failed auto industry bailout bill in 2008, as well as opposing the final Dodd-Frank reform law in 2010. (Still, he served on the conference committee that shaped the final bill.)

Crapo also voted against the nomination of Ben Bernanke to a second term as chairman of the Federal Reserve Board in 2010.

"Crapo was very supportive of Shelby," said Calabria, noting that "Idaho is a fairly conservative, libertarian state."

Last month, Crapo introduced a bill with Shelby and Sen. Bob Corker, R-Tenn., to require the Consumer Financial Protection Bureau to conduct a small-business panel for its qualified mortgage rule. He's also been an active figure in the deficit reduction debate, voting for the Simpson-Bowles Commission plan and working as part of the Senate's bipartisan "gang of six."

The Idaho Senator includes a telling quote from James Madison on the banking page of his official website: "The most productive system of finance will always be the least burdensome."

On the site, Crapo adds that he voted against the Dodd-Frank law because it "failed to address crucial aspects of the crisis [and] … it would restrict access to credit, discourage capital formation, and yet once again create a large, new, expensive government bureaucracy unreasonably extending the federal government's control over the economy."

He also emphasizes the need for reform of government-sponsored entities Fannie Mae and Freddie Mac.

"If Johnson continues two years of defending Dodd-Frank, then I think you're going to see Crapo step into that role of being critical of Dodd-Frank," said Calabria.

Spokespersons for Shelby and Crapo declined to comment for this article.

Observers cautioned that it can be difficult to predict what direction leaders will take a committee before they step into a leadership role, and what specific issues they might choose to highlight.

"The unknown behind this is that members act differently when they're in the chairman or ranking member seat," Calabria said. "Not that members don't take committee assignments and voting seriously, but … generally, there is a sense of 'This is your watch.'"

Part of Crapo's success as ranking member will also be dependent on how aggressive an agenda Johnson lays out as chairman. Observers said they're not necessarily expecting any major legislation to come out of the committee, in line with the past couple of years.

"The only problem, and I think it's a problem for any chairman or ranking member, is that depending on what happens with control of the Senate and what happens with the White House, it's hard to see any real consequential legislation coming out of that committee in the near term," said Fratto, though he notes that "just shining a light on important issues" is also a key committee role.

Ultimately, it's still impossible to predict for sure how succession will play out next year. Republicans could win control of the Senate, which would give Shelby two more years as chairman under conference rules. (Polling aggregation website FiveThirtyEight has reported more than 80% probability that Democrats will keep their slim majority, with 52 seats compared to 48 GOP seats.) Even if Democrats stay in control, Shelby could decide to stay on the committee as the senior member while handing over the ranking member seat or leave the committee altogether, both of which could potentially change the trajectory and tone of committee proceedings. Technically, Shelby might even apply for a waiver to stay on in his current spot, though the use of such waivers is rare.

The conference passed its term limit rule after the 1994 elections, and has never issued a waiver for that particular rule. The conference has waived other rules in the past at its discretion, including other committee assignment rules, but it's a relatively rare occurrence.

The decision to grant a waiver would also depend on other committee openings and other issues, observers say.

"It's tough to handicap waivers. With internal conference issues there are always a series of dominoes," said Gardner, as party leaders juggle the preferences of multiple lawmakers.

"I would not rule out a waiver just because I think Shelby is a very savvy player, and if he wants to stay in a top position on the committee, [Senate minority leader Mitchell] McConnell may try to accommodate him," he added.