WASHINGTON — As voters head to the polls on Election Day, a number of issues that matter to bankers — including Federal Reserve policy, inflation and regulation — are indirectly on the ballot.
While the campaign between Vice President Kamala Harris and former President Donald Trump has made little mention of banking or financial regulatory policy, the result will shape the way that banks interact with Washington for years to come — including personnel choices in bank regulatory positions, economic policies or the tone either candidate would set for the country going forward.
But the action is not limited to the top of the ticket. The results of several
The results of the race could tee up intraparty struggles as well. Rep. Adam Schiff, D-Calif. — one of the most crypto and fintech friendly Democrats on Capitol Hill — appears poised to win a Senate seat, setting up conflicts between himself and a crypto-skeptical progressive wing of the Democratic faction of the Senate Banking Committee.
And the results could shuffle the deck of key committee assignments on Capitol Hill, including familiar faces in important positions.
While most anticipate that the House will flip to Democratic control while the Senate will be grabbed by Republicans, the margins in either chamber will likely be tight.
Should the conventional wisdom prevail, Jaret Seiberg, a financial services and housing policy analyst for TD Cowen, said that Rep. Maxine Waters, D-Calif., would likely return to take the gavel of the House Financial Services Committee. Sen. Tim Scott, R-S.C., would likely become the chair of the Senate Banking Committee if Republicans prevail in the upper chamber, though he may also be offered a post in the Trump administration.
"Where it gets interesting is if the conventional wisdom is wrong and the Dems keep the Senate and the Republicans keep the House," Seiberg said. "At that point we're looking at the possibility that Elizabeth Warren chairs the banking committee, and we have a pretty contested fight for the gavel in House Financial Services."
A new crop of bank-savvy lawmakers could also soon make their way to Congress. Notable among them is
Ultimately, though, much of the direction on bank and financial policy will be directed by the person who is elected to the presidency — or at least by the people they appoint to critical roles, including the head of the Consumer Financial Protection Bureau, Federal Deposit Insurance Corp., Federal Reserve and the Office of the Comptroller of the Currency.
"Like most presidents, neither Harris nor Trump
Harris is expected to consider both progressive and moderate choices for these key roles, he said.
"But we probably get more moderates because she would want to get some of the key ones confirmed by the Senate, and not just in acting roles," Katz said. "With Trump it's possible we could get some agency heads who are unconventional and somewhat populist."
Katz said that most of Trump's picks would most likely be more traditional Republican choices, such as the regulators he put in place during his first term.
"But the truth is that we just don't know," he said. "There could be big surprises."
For Trump's policies, most of the more dramatic policy differences between his last term and a potential second term fall into the macroeconomic sphere, such as raising tariffs on all imported goods and taking a more active role in setting interest rates. By contrast, he has made little mention of a change in attitude on financial regulatory policy.
"Trump is somewhat of a known quantity from a financial regulatory perspective. So I think we kind of know what's going to go on," said Isaac Boltansky, managing director and director of policy research at BTIG. "So to me, it's the bigger macro questions."
Some of those topics could have a large impact on bankers, he said.
"I think the questions that bankers have are the questions that we all have," Boltansky said. "What are tariffs going to do to the economy? What would a global trade war do to supply chains? How would the combination of tariffs and increased border enforcement impact inflation?"
Some of Trump's other ideas could present headwinds for financial companies, Seiberg said.
"The Trump of 2024 is far more populist than the Trump of 2016, and we've seen with his call for a 10% cap on interest rates, we've seen that in his push for tariffs," he said. "And then, you know, his idea of deporting upwards of 20 million people is also an inflation and interest rate risk for the banks as that could exacerbate the employment shortage."
That said, there are some predictions about the kinds of changes that either candidate could make on banking and financial policy.
"For financial companies, this election is really about whether you believe what the candidates are saying, or if you believe what the candidates have done," Seiberg said. "If you believe what they're saying, Harris is the better pick because some of Trump's plans would be quite negative for the financial sector. By contrast, if you believe what they've done, Trump's record in his first term of lower taxes and less regulation, is music to the ears of the financial services sector."
On Harris' end, her participation in Biden-era policies that target the financial sector could also be tipping financial industry
"The concern with Harris really is that she's been part of a Biden administration where the CFPB has been extraordinarily aggressive, and I think the worry is that she would continue on that same path, and that she could even retain some of the existing regulators," he said.
