On Monday, Jan. 18, President-elect Joe Biden announced his nominees for six senior administration positions, including two allies of far-left U.S. Sen. Elizabeth Warren (D-Mass.) for key financial sector oversight positions. According to analysis, the move indicates that the Biden administration will adopt a more aggressive regulatory policy toward big business.
Chopra to be director of the Consumer Financial Protection Bureau (CFPB)
Biden has nominated Rohit Chopra, a current commissioner of the Federal Trade Commission (FTC), to be the next director of the Consumer Financial Protection Bureau (CFPB). The agency, which was Warren’s idea, has often been criticized by Republicans for being over-regulated and too heavy-handed.
Under President Trump (R-Texas), the CFPB’s directors have relaxed the agency’s strict approach to financial institutions, while Democrats have called for a more powerful agency to target what they say are violations in the financial industry.
Chopra, a Warren ally, helped launch the CFPB in 2011 and previously served as the agency’s assistant director, leading student loan efforts. In his FTC biography, he noted that at the FTC he “proposed aggressive remedies for companies that violated the law, especially repeat offenders, and worked to reverse the FTC’s reliance on no-money, no-fault solutions.”
A lawsuit filed in 2019 alleges the CFPB is unconstitutional, with dozens of House Republicans arguing in an amicus brief that the CFPB’s leadership structure is “an affront to the separation of powers'” because it allows the agency to “undermine one of the central pillars of our constitutional system.
In June 2020, the U.S. Supreme Court ruled that the CFPB’s structure was unconstitutional because it “violates the separation of powers,” but did not abolish the agency. Chief Justice John Roberts wrote in an opinion, “The agency may therefore continue to operate, but its directors must be removed at will by the president, according to our decision.”
Geisler to lead the Securities and Exchange Commission (SEC)
Biden also appointed Gary Gensler, an Obama-era Wall Street regulatory official, to lead the Securities and Exchange Commission (SEC).
Gary Gensler had worked for Goldman Sachs (Goldman Sachs) for 18 years, joined the U.S. Treasury Department in 1997. Former President Barack Obama appointed him to head the Commodity Futures Trading Commission in 2008, where he made a name for himself as an aggressive regulator. He helped reform the rules surrounding the $400 trillion swaps market as part of the Obama administration’s overhaul of financial sector regulations in the wake of the 2008 financial crisis.
Shortly before becoming chairman of the Commodity Futures Trading Commission, Geisler said, “All of us involved at the time, and certainly myself, should have done more to protect the American public through aggressive regulation.”
Biden’s incoming economic team has already said it will shape economic policy around issues such as climate change, gender equality and race, rather than just traditional performance metrics such as gross domestic product. One of Biden’s proposals falls under the purview of the U.S. Securities and Exchange Commission (SEC). The proposal would require publicly traded companies to disclose data on the racial and gender composition of their corporate boards “to better assist shareholders and advocates in calling for diverse and inclusive governance structures.”
Some conservatives have expressed reservations about it. Richard Morrison, a fellow at the conservative Competitive Enterprise Institute, said the former SEC chief has warned that “the Commission will implement reporting standards on environmental, social and governance (ESG) topics.
Morrison wrote that “this is wrong” about the proposal to include political considerations in financial sector regulatory plans and urged Geisler to avoid taking an aggressive stance in this regard.
In a statement, Morrison wrote, “I urge Mr. Geisler to focus on the Commission’s core mission of protecting investors and promoting capital formation, rather than forcing firms to report on whether they support a long list of divisive initiatives with political goals.”
It is unclear how quickly the Senate will vote on Biden’s nominee. So far, hearings on four key officials have been scheduled for Jan. 19: retired Army Adm. Lloyd Austin for defense secretary, Janet Yellen for Treasury, Alejandro Mayorkas for homeland security secretary The Secretary of State, Antony Blinken, is the Secretary of State.
Recent Comments