With democrats now in control of Congress and the White House, the transition in political power means shake-ups in top federal economic positions, too. Democratic regulators are more likely to push for tighter banking regulations as well as prioritize increased federal relief as the economy falters due to the COVID-19 pandemic.
Janet Yellen, Biden’s newly appointed Treasury Secretary, will be the first woman to serve in the position. Yellen served as chair of the Federal Reserve from 2014 to 2018, also the first woman to fill that role. As chair, she was known for her bipartisan leadership and is well-respected on both sides of the aisle. As Treasury Secretary, she has made it clear that her priority is economic relief for the American public. Yellen has also proven herself to be a climate advocate, and is likely to push for increased climate-related banking regulations, like requiring banks to disclose their climate impact and imposing higher capital requirements on fossil-fuel financing.
Biden has yet to announce who he will appoint to the open seat on the Federal Reserve, a nominating process notorious for its vulnerability to partisan gridlock. Next year, Biden will face the choice to reappoint or replace current Fed chair Jerome Powell and two vice chairs, Richard Clarida and Randal Quarles, when their terms expire.
The Office of the Comptroller of the Currency is waiting for news of its next leader as well. Biden is expected to tap Michael Barr to lead the agency, The Wall Street Journal reported. Barr is a former Treasury Department official and current dean of public policy at the University of Michigan. During his tenure at the Treasury Department, he helped shape the 2010 Dodd-Frank Act. Barr has been openly critical of the Trump administration’s efforts to ease regulations for big banks and has called for a stronger Consumer Financial Protection Bureau.
In a win for progressives, Biden has nominated Gary Gensler to lead the Securities and Exchange Commission and Rohit Chopra to lead the CFPB. Gensler served as chair of the Commodity Futures Trading Commission under President Obama, and was the chief financial officer for Hillary Clinton’s 2016 presidential campaign. Gensler is known for challenging big banks, leading CFTC efforts to introduce new rules regulating swaps markets. Chopra, a former student loan ombudsman at the CFPB, is an ally of progressive Sen. Elizabeth Warren who helped launch the CFPB. He previously served as the bureau’s assistant director.
On the legislative side, Wall Street critic Sen. Sherrod Brown (D-Ohio) is expected to take over as chair of the Senate Committee on Banking, Housing and Urban Affairs. The committee has been under GOP leadership since 2015 and has previously focused on deregulating the financial services industry. As chair, Brown said he plans to focus on plans to expand affordable housing, strengthen regulations loosened during the Trump Administration. He also promised to view financial services through a racial justice and climate change lens.