Vice President Kamala Harris speaks on the South Lawn of the White House on Monday, July 22, 2024. The vice president's first task in formally securing the Democratic presidential nomination will be to corral her former congressional colleagues, newly emboldened after a successful pressure campaign to force their party's leader, Joe Biden, off the 2024 ballot.
Ting Shen/Bloomberg
The biggest story in the world is happening right now, but it isn't immediately clear what it means for banks.
This election is not about banking, because very few elections — with the exceptions of maybe 1930 and 2008 — ever are. In fact, with the possible exceptions of economics, health care and foreign policy, most policy arenas are afterthoughts on the national political stage — those smaller decisions like how much subsidy to offer soybean farmers or how much margin to require on cleared derivatives fall to agencies, and the distinctions in vision tend to be between Democratic and Republican administrations rather than between individual appointees. Put another way, banks can usually tell the difference between Democratic and Republican administrations, but not between one Democratic or Republican administration and another of the same stripe.
But at this moment, we have something that could actually be quite different. Vice President Kamala Harris stands poised to be the Democratic nominee at the party's convention next month, and will take the stage with a relatively clean slate. She has been active in the Biden administration, to be sure, but we know relatively little about what her policy preferences are or what her individual contributions may have been. She is free to either champion or disavow Biden's policies as she sees fit — and will likely be compelled to do so in the coming months — but aside from her time as California attorney general and senator, she's relatively unencumbered by her record or Biden's. She can paint the picture for voters that she wants to paint, and in doing so tell voters what she thinks they want to hear.
There are a couple of things that, if I were Harris, I would think people would want to hear. One is that there is a structural shortage of housing in the United States, and that problem is at the root of issues like homelessness, declining household formation and racial wealth disparities. Developing some kind of a plausible strategy to make housing stability and/or homeownership viable for more Americans — particularly younger Americans who are most locked out of the housing market — should be a top priority for the now-Harris campaign.
Another priority would be getting serious about mitigating the risks posed to consumers and the financial system by nonbank financial companies. Banks are regulated and supervised because if they aren't they can damage not only themselves but their customers and the broader economy. The same is true of many nonbanks, but their regulation is decidedly less stringent or consistent for the simple reason that they are not called banks. The Financial Stability Oversight Council has made some inroads in this arena in recent years, but the thrust of those initiatives have been more procedural and fact-finding in nature than they could be. With the recent demise of fintech middleware provider Synapse, leaving thousands of customers' savings in limbo, now is the time to put nonbanks on notice.
When Donald Trump was first elected, I thought it was an amazing opportunity for him to do something new. No one had ever been elected president without holding public office before, and he won his party's nomination on his terms and without pledging fealty to the party's orthodoxy. What we got — at least in finance — was a mostly Republican administration indistinguishable from any other. Harris has a similarly unique opportunity to chart her party's course, so long as she doesn't throw away her shot.
The action rids the Montana bank of a $62.8 million loan that's long been on its watch list. It comes as First Interstate's new CEO looks to put his own stamp on the bank.
The Consumer Financial Protection Bureau issued separate policy statements on "sandbox approvals" and no-action letters for fintechs — measures whose longevity is questionable with the incoming Trump administration.
Texas Capital Bancshares promotes Aimee Williams-Ramey to chief human resources officer; M&T Bank hires Wells Fargo veteran Krista Phillips for newly created post of chief customer officer; Paul Connolly and Paul Speiss age out of their positions on Eastern Bankshares' board; and more in this week's banking news roundup.
In a speech outlining his priorities for the FDIC, Vice Chair Travis Hill stressed the need for a more flexible regulatory approach, addressing capital requirements, digital assets, climate policy, and bank oversight, while emphasizing transparency and timely action.
