Rep. Jeb HensarlingThomas (Jeb) Jeb HensarlingLawmakers battle over future of Ex-Im Bank House passes Ex-Im Bank reboot bill opposed by White House, McConnell Has Congress lost the ability or the will to pass a unanimous bipartisan small business bill? MORE’s retirement, which he announced Tuesday, did not come as a complete surprise as the Texas Republican is term-limited as chairman of the House Financial Services Committee. By the time Congress adjourns next year, he will have served as chairman for six years, the maximum permitted under House Republican rules.
A champion of financial deregulation, Hensarling authored the Financial CHOICE Act of 2017, which would roll back many aspects of the Dodd-Frank Act, which Congress enacted in 2010. The House, which passed this bill on June 8, awaits Senate action.
Like many Republican deregulation measures, though, Senate passage of the CHOICE Act is highly problematic given the much narrower edge Republicans have in the Senate. However, important pieces of the bill, along with other deregulation measures Hensarling has guided through the House, may pass the Senate in modified form.
Although he only has a year left in the House, Hensarling will have plenty to keep him busy. Foremost will be leading House negotiations with the Senate over whatever financial deregulation legislation makes it out of the Senate. Often, important legislative provisions get written in conference committee. That legislation could be the capstone to his congressional career.
Having moved the CHOICE Act out of the House, Hensarling can now devote more effort to reforming Fannie Mae and Freddie Mac. While past reform efforts have been unsuccessful, it seems reasonable to speculate that he will take another crack at resolving one of the most challenging financial-services issues of recent years.
In the aftermath of the substantial losses the federal flood insurance program has suffered this year due to Hurricanes Irma and Maria, Hensarling may take on that very challenging reform effort during his final year as committee chairman. Success, though, will be far from certain.
HENSARLING retiring. His office told me yesterday it was "full steam ahead until something changes"! https://t.co/HBnu63HhdG— Scott Wong (@scottwongDC) October 31, 2017
Speculation has already begun on what Hensarling will do once he leaves the House. Although he has indicated that he would like to spend more time with his family, it is highly unlikely that this youthful-looking 60-year-old will fully retire.
Given the number of vacancies in the Trump administration and Hensarling’s conservative bona fides, no doubt the president would appoint him to an important position at Treasury or elsewhere in the government, if he would want to serve in the current administration.
With his background on housing finance issues, Hensarling potentially could be appointed as director of the Federal Housing Finance Agency, which regulates the activities of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. However, the term of the current director, former Rep. Mel Watt (D-N.C.), does not end until January 2019.
If he does not remain in the government, Hensarling will have ample professional opportunities after he leaves congress, either in Washington or back in Texas.
Given the strong GOP tilt of Hensarling’s district — Trump received 62.5 percent of the presidential vote in the district last year and no Democrat challenged Hensarling in his last two elections — it is highly likely the district will stay Republican.
Hensarling’s retirement announcement immediately launched speculation as to who will succeed him as Financial Services chairman, should the Republicans retain control of the House.
There is no obvious successor, but a number of senior Republicans on the committee could seek the chairmanship or a ranking-member position, should the Republicans lose the House, including Reps. Ed Royce (Calif.), Frank Lucas (Okla.), Patrick McHenry (N.C., currently the committee’s vice chairman), Blaine Luetkemeyer (Mo.), Bill Huizenga (Mich.) and Sean DuffySean DuffyTrump pushing ex-Rep. Duffy to run for Wisconsin governor Fox News signs book deal with HarperCollins First lady's press secretary calls on Rachel Campos Duffy, Fox News to apologize for host's comments MORE (Wis.).
All of these pieces will begin to fall in place over the next year.
Bert Ely is a principal of Ely & Company, Inc., where he monitors conditions in the banking industry, monetary policy, the payments system and the growing federalization of credit risk.