Sept. 23 — The Senate Banking Committee is expected to have a more robust legislative agenda under its next chairman, who will be more likely to try to make deals, no matter which party wins control of the Senate.
Either Sen. Mike Crapo (R-Idaho) or Sen. Sherrod Brown (D-Ohio) is on the verge of assuming the gavel after the election, and policy analysts predict a more productive committee compared to that of the departing chairman, Sen. Richard Shelby (R-Ala.).
“One thing’s for sure, the banking committee will be much more active under new leadership,” Emily Liner, a financial policy adviser at the centrist think tank Third Way, told Bloomberg BNA.
Under Shelby, the committee hasn't held a markup on banking legislation since May 2015. It has approved some of President Barack Obama's nominees but others have remained in limbo.
“I think that the Senate Banking Committee has been disappointing in the level of legislating that’s been done in this Congress,” Isaac Boltansky, a policy analyst at Compass Point Research & Trading, told Bloomberg BNA.
There is some optimism, he said, that new committee leadership will renew legislative focus on mortgage finance and regulatory relief efforts for small financial institutions.
“That being said, I have trouble believing either one of those will result in legislation being enacted,” Boltansky said. “Those are complicated, voluminous efforts, so moving the ball forward at all is a positive thing. They really haven’t done that” in the current Congress.
Republican caucus rules limit the terms of committee chairmen, and Shelby is bumping up against that cap. If Republicans retain a Senate majority, Crapo, who was first elected to the Senate in 1998 after three terms in the House, is next in line for the chairmanship.
Crapo's substantive policy positions, analysts say, are similar to Shelby's, but he is less likely to follow Shelby's lead by running a quiet committee.
“There's room for a deal if both sides want to make one” on regulatory relief for community banks and changing the asset threshold that automatically qualifies banks as systemically important, Justin Schardin of the Bipartisan Policy Center told Bloomberg BNA.
Crapo would be open to brokering a deal on those issues, Schardin said, but warned that “you generally will win if you consistently bet against Congress doing something.”
Shelby's sweeping 2015 bill, the subject of the committee's last markup, addressed those policy areas but also included changes to the Federal Reserve that were unpalatable to Democrats.
That bill might be a starting point for a Crapo chairmanship, but other changes would have to be made for further progress. “A massive regulatory relief package is unlikely to be passed because it will be portrayed as a Trojan horse for weakening the core tenets of the Dodd-Frank Act,” Boltansky said. Community bank legislation has the “path of least resistance, politically and practically.”
Crapo chairs the securities subcommittee, which has held 2016 hearings on fixed-income markets and small-business capital formation. Those issues could attract his attention again in 2017.
Should Democrats win back control of the Senate, Brown is in line to lead the panel. Brown, who was elected to the Senate in 2006 after 14 years in the House, is a liberal Democrat who sharply criticizes large financial institutions. But he would likely have to temper those instincts as leader of the committee.
A Democratic majority would be slim, and Brown would need to make overtures to the panel's four moderate Democrats: Sens. Joe Donnelly (Ind.), Heidi Heitkamp (N.D.), Jon Tester (Mont.) and Mark Warner (Va.).
“He needs everybody on the committee to get anything done,” Schardin said. He would have to “mediate between the two wings” of the Democratic Party.
“Sherrod Brown is a progressive through and through, but that doesn’t preclude him from being a deal-maker as well,” Boltansky said.
He noted Brown's involvement in the “Collins amendment,” which set minimum capital requirements for some financial institutions and is one of few Dodd-Frank Act changes to become law.
“If Brown becomes chair, I predict he will be a little less fiery,” Bartlett Naylor, a financial policy advocate at nonprofit Public Citizen, told Bloomberg BNA. “You’ll see him get on very few bills as a cosponsor.”
Brown has noted that he is willing to work with Crapo, referring to him as “straightforward and honorable” during a July event in Washington.
Sen. Elizabeth Warren (D-Mass.) figures to continue her outsized presence on committee matters, taking witnesses to task and advocating for a progressive agenda.
“I think Elizabeth Warren has really changed the dynamic,” Naylor said. “There are 100 senators, and until two years ago, none of them woke up every day thinking about banking.”
The committee roster could also look different in 2017.
Former Sen. Evan Bayh (D-Ind.), a moderate, is running for his old seat. If elected, he could make a deal with incoming Senate Democratic Leader Charles Schumer (N.Y.) to regain his previous seniority, which would potentially give him the chairmanship under a Democratic majority.
Boltansky said he would be “absolutely shocked,” however, if one of Schumer's first moves a party leader were to replace the liberal Brown with the moderate Bayh, risking rancor from the party's left wing.
Several moderate Republican seats could change as well: Sen. David Vitter (La.) is leaving the Senate, and Sens. Mark Kirk (Ill.) and Pat Toomey (Pa.) face tough re-election contests.
“They’re guys who work with Democrats whenever they have the opportunity, and they may no longer be there,” Liner said.
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