What would a Biden win mean for Wall Street?

Wall Street is likely to face a tough next four years as President Joe Biden’s team announced plans to nominate two candidates to run leading financial agencies. Their appointment signals a tougher position in the industry than many expected..

Gary Gensler will serve as chairman of the Securities and Exchange Commission (SEC), and a member of the Federal Trade Commission Rohit Chopra will head the Consumer Financial Protection Bureau (CFPB). The White House believes these institutions are critical to advancing political priorities on climate change and social justice..

Republicans criticized Joe Biden for such personnel decisions.

Gensler, head derivatives market regulator from 2009 to 2014, implemented new swap rules created by Congress in the wake of the financial crisis, developing a reputation for being tough to counter Wall Street.

Rohit Chopra helped create the CFPB and was its first student loan ombudsman. At the FTC, he advocated tougher rules for big tech companies on consumer privacy and competition, and increased fines for lawbreakers..

Since Republicans appeared to have a good chance of retaining control of the Senate after the election, finance executives hoped Biden would pursue a more moderate policy.. However, Democratic victories in the second round of elections in Georgia earlier this month mean they will gain control of the House of Representatives once Biden and the Vice President Kamala Harris will take the oath.

It also means that an ardent opponent of Wall Street Sherrod Brown will head the Senate Banking Committee. He said he plans to lift Wall Street-friendly rules imposed by the president’s regulators Donald Trump.

Brown named Chopra’s potential appointment «a bold choice», which the «will provide CFPB with a leading role in the fight against racial inequality in the country’s financial system», and Gensler «will prioritize solving the problems of the working class».

Gensler is expected to push for new corporate disclosures on climate change risks, political spending, staff composition and operating hours, and end post-crisis caps on executive compensation.

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Chopra, presumably, will revise the rules of lending on payday, and also deal with the issue of excessively tough debt collection..

«The CFPB has a mountain of important work ahead of it, such as ending financial fraud. The agency also plays a significant role in helping families recover from the economic crisis caused by the pandemic.», – said Lisa Donner, executive director of the think tank American for Financial Reform. 

However, Biden will first have to fire Katie Craninger, current CFPB director.

Richard Hunt, Chief Executive Officer of the Consumer Bankers Association: Frequent Leadership Changes Will Not Benefit Americans.

«Our association does not believe that it is in the interests of consumers to get a new director with every change of administration.. This practice will inhibit the development of innovation and hinder consistent regulation.», – he said.

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