The Senate Committee on Banking Housing and Urban Affairs is facing major changes in its makeup depending on the outcome of the election, especially if Chairman Sherrod Brown, D – Ohio,loses his race.
“The committee is filled with senior members, so I assume the likes of Sens. Jack Reed and Elizabeth Warren will push for the gavel,” said Brett Bolton, VP, Federal Legislative and Regulatory Policy at the Bond Dealers of America.
Brown is in a tough reelection race against Republican Bernie Moreno, a car dealer supported by former President Trump. As of Aug.12, Brown is ahead a few points according to most polls.
If the Republicans gain control of the Senate, the presumption is that Ranking Member and Trump loyalist, Tim Scott, R – S.C., would take over the chair.
Brown and Scott united to help oust Martin Gruenberg as chair of the Federal Deposit Insurance Corporation in May amidst charges of the government-owned group running a toxic workplace.
At the time, Brown said, “After chairing last week’s hearing, reviewing the independent report, and receiving further outreach from FDIC employees to the Banking and Housing Committee, I am left with one conclusion: there must be fundamental changes at the FDIC.”
Gruenberg has worked at the FDIC for nearly 20 years and is in his second term as chairman. He has agreed to step down as soon as his successor is approved. President Joe Biden has since nominated Christy Goldsmith Romero who’s a member of the Commodity Futures Trading Commission to take over the embattled organization.
Romero will need to get approval from the Banking Committee and the Senate to take command, which seems likely.
Scott has already gone on the record with doubts about her ability to deal with the
“The next chair needs to be prepared to lead, because not only are we going to have to confront the magnitude of Basel III Endgame, but as I said a few times already, correcting the culture of the FDIC is so important,” said Scott in a statement. “And it makes it challenging to have on the job training, from my perspective.”
The FDIC is also one of the agencies leading the implementation of the Financial Data Transparency Act, legislation designed to add more transparency to the municipal bond market. The legislation calls for issuing disclosures in a machine-readable format with less reliance on PDFs.
In early
Brown and Sen. Elizabeth Warren D – Mass., have both expressed support for Romero. While Warren was a featured speaker at the Democratic National Convention, Brown did not make an appearance suggesting that he was trying to create some distance between himself and presidential nominee Kamala Harris.
John Fetterman D – Pa., and Jon Tester D – Mont., who both serve on Senate Banking were also notably absent.
Tester, who’s been elected in the ruby red state for three terms is also in tough political fight against Republican Tim Sheehy, a businessman and former US Navy Seal who is backed by Trump. Some polls have Tester currently up by five points.
The Banking Committee lost longtime muni champion Sen. Bob Menendez D – N.J., when he was convicted of taking bribes and resigned from the Senate earlier this week.
If the Trump-Vance ticket emerges victorious in November, J.D. Vance R – Ohio, would have to be replaced on the committee.
Assuming Trump loses, Vance would likely remain on the committee and continue the possibility of strange political bedfellows. Vance has backed legislation by Warren that would clawback compensation earned by executives at failed banks.
Vance also co-sponsored a bill by Richard J. Durbin D – Ill., that would prevent large credit card issuers from restricting access to electronic payment networks by smaller issuers.
Vance has used his perch on the committee to train fire on Federal Reserve Chair Jerome Powell and Securities and Exchange Commission Chair Gary Gensler.
The Senate Banking Committee has jurisdiction over the nation’s financial markets, banks, and insurance companies. They oversee mortgage insurance, credit unions, and housing projects.
The lobby tracking site Open Secrets puts all those interests into the finance/insurance/real estate sector, which according to them, “has historically been the largest donor among all sectors and particularly generous to committee members.”
According to Open Secrets, the Securities and Investment industry contributed $27,968,076 to members of the Banking Committee in 2024 with an average of $1,216,003 contribution per member. Sen. Krysten Sinema I – Ariz., netted the most with $3,498,724 in contributions. Sinema has announced she would retire at the end of her term this year. Sen. Tim Scott came in second with $3,115,698.
Handicapping the race will continue to election night and assuming the Democrats remain in charge of the Senate and Brown wins in Ohio, it’s possible nothing will change on the Senate Banking Committee. “If that happens, I assume leadership will remain the same,” said Bolton.