Midterms to shake up top posts on House finance panel

Midterms to shake up top posts on House finance panel
© Greg Nash

The midterms are poised to have a significant impact on how the House oversees the financial sector, regardless of which side wins in November. 

A Democratic takeover of the House would propel Rep. Maxine WatersMaxine Moore WatersK Street works to court minority lawmakers Black Caucus huddles as talk of term limits heats up On The Money: Markets roiled by trade tensions | Rally on hopes of Fed pause on rate hikes | Senate sends two-week spending measure to Trump | Consumer bureau pick confirmed | Trade deficit at highest level since 2008 MORE (D-Calif.), the House Financial Services Committee's ranking member and a fierce critic of President TrumpDonald John TrumpActivists highlight Trump ties to foreign autocrats in hotel light display Jose Canseco pitches Trump for chief of staff: ‘Worried about you looking more like a Twinkie everyday’ Dershowitz: Mueller's report will contain 'sins' but no 'impeachable offense' MORE, into a powerful perch with subpoena power.

Her ascension could pose new political challenges for the nation’s biggest banks and force the White House to contend with congressional probes into the president’s personal finances during the 2020 election season.

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Waters has said that she’s eager to work with both parties to find “sensible solutions to benefit hardworking Americans and strengthen our nation’s economy.” But the panel is also expected to launch several investigations into the personal finances of Trump, his family and his business if there’s a blue wave on Election Day.

Led by Waters, Financial Services Democrats have called on Committee Chairman Jeb HensarlingThomas (Jeb) Jeb HensarlingRare bipartisanship in lame duck Congress battling the ‘WTO’ of insurance regulation On The Money: Markets roiled by trade tensions | Rally on hopes of Fed pause on rate hikes | Senate sends two-week spending measure to Trump | Consumer bureau pick confirmed | Trade deficit at highest level since 2008 McHenry to lead GOP on banking panel, duel with Maxine Waters MORE (R-Texas) to subpoena documents from Deutsche Bank and the Treasury Department that could shed light on potential financial connections between Trump and Russia.

Republicans have quashed those requests, but Waters would be empowered to demand documents if a Democratic wave gives her control of the committee. 

“If there is information that is going to be unveiled about what has been going on in the White House or Donald Trump or the Treasury, it will come out,” Waters said Sunday on MSNBC, vowing to pursue the matter “in a responsible way.”

“I am not looking to make up stories or to create ways by which to trap anybody,” she said. “I will just do my work as a member of Congress and as a chairman.”

Republicans, meanwhile, are attempting to defend their House majority, and GOP lawmakers on the Financial Services Committee are jockeying for position to succeed Hensarling, who’s retiring from Congress at the end of this term.

Rep. Patrick McHenryPatrick Timothy McHenryGOP struggles to win votes for Trump’s B wall demand Veteran Capitol Hill aide Parker Poling to serve as next NRCC executive director Dole salute embodies emotion of Bush farewell MORE (R-N.C.), the panel's vice chairman and a deputy whip, appears to have a clear path to the top Republican spot on the committee if he passes on a chance to climb higher up the leadership ladder. If he decides to further pursue the leadership route, three of the panel's senior Republicans are expected to compete for the top spot.

Hensarling's potential Republican heirs share similar views on financial regulation, and each would play a leading role GOP efforts to loosen post-crisis rules. 

The Financial Services Committee takes the lead on the House’s efforts to oversee and legislate changes to the vast network of U.S banks, lenders, insurers, investors and housing. Members of the panel enjoy influence over critical legislation and easy access to lucrative donations from powerful financial firms.

Hensarling has led the committee since 2013 and would have been required to surrender the gavel, or the top GOP seat, under House Republican term-limit rules. He announced last year that he would retire at the end of the 115th Congress after representing parts of Dallas since 2003.

Hensarling spent the first four years of his chairmanship laying the groundwork to overhaul the 2010 Dodd-Frank Wall Street reform law. His sweeping rewrite was opposed by Democrats and rejected by the Senate last year, but he helped Congress pass a more moderate, bipartisan rollback in May.

Committee Republicans and industry lobbyists say McHenry is the top contender to build on the GOP’s small but significant tweaks to Dodd-Frank. They say McHenry would likely claim the gavel with little or no competition, citing his experience and seniority.

But some GOP lawmakers expect McHenry to climb the House leadership ladder as Majority Leader Kevin McCarthyKevin Owen McCarthyGOP congresswoman says she opted out of NRCC run because McCarthy had 'a different plan' GOP struggles to win votes for Trump’s B wall demand GOP floats short-term CR with B for border wall MORE (R-Calif.) and Majority Whip Steve ScaliseStephen (Steve) Joseph ScaliseOn The Money: House GOP struggles to get votes for B in wall funds | Fallout from Oval Office clash | Dems say shutdown would affect 800K workers | House passes 7 billion farm bill GOP struggles to win votes for Trump’s B wall demand Dem knocks GOP colleagues: Blame 'yourself' for unfavorable Google search results MORE (R-La.) vie to replace retiring Speaker Paul RyanPaul Davis RyanOn The Money: House GOP struggles to get votes for B in wall funds | Fallout from Oval Office clash | Dems say shutdown would affect 800K workers | House passes 7 billion farm bill GOP struggles to win votes for Trump’s B wall demand House GOP blocks lawmakers from forcing Yemen war votes for rest of year MORE (R-Wis.).

McHenry said in a statement that he’s focused on “advancing the House Republican agenda and ensuring we maintain a conservative House majority this November. Any decisions about my plans for next Congress will be made after the election.”

Rep. Blaine LuetkemeyerWayne (Blaine) Blaine LuetkemeyerRepublican McHenry announces bid for Financial Services ranking member On The Money: Midterms to shake up House finance panel | Chamber chief says US not in trade war | Mulvaney moving CFPB unit out of DC | Conservatives frustrated over big spending bills Midterms to shake up top posts on House finance panel MORE (R-Mo.) said he would run to succeed Hensarling if McHenry doesn’t, calling the vice chairman a “good friend” and “proven leader.” GOP Reps. Bill Huizenga (Mich.) and Sean DuffySean Patrick DuffyRare bipartisanship in lame duck Congress battling the ‘WTO’ of insurance regulation House votes to remove protections for gray wolves Here's how politicians celebrated Halloween MORE (Wis.) have also expressed interest in the Financial Services chairmanship.

Huizenga told the The Hill in an interview that he's begun meeting with GOP leaders charged with filling committee posts and has gotten a "very positive response." But he added that he would drop his bid if McHenry seeks the gavel.

“I think Patrick is probably the only person who frankly clears the field," said Huizenga, praising McHenry's work filling in for Scalise last year when the House majority whip recovered from gunshot wounds.

Luetkemeyer, Huizenga and Duffy hold Financial Services subcommittee chairmanships and all three have raised hefty sums for the House Republican campaign arm, two helpful pitches to the GOP leaders who help decide committee assignments.

Luetkemeyer appears to be the early front-runner, with one bank lobbyist telling the The Hill that the Missouri Republican has “the most support” if McHenry is focused instead on a leadership position. Luetkemeyer has been in the House since 2009 — two years longer than Huizenga and Duffy — and worked in the banking and insurance industries before launching his political career.

"I want to continue to empower our people and our businesses to take advantage of the economic freedom that's provided to them by what we have in place,” Luetkemeyer told The Hill in an interview. “Jeb's done a good job of breaking those barriers down, and we want to continue to do that.”

Hensarling has not weighed in on the race to replace him, and the three likely GOP successors are expected to continue their efforts to ease financial regulations and rein in federal regulators who they say are smothering banks and lenders.

Trump’s election and the Republican control of Congress has helped banks score the biggest victories against regulations in decades. Industry lobbyists are therefore worried that those gains could be reversed if Democrats take control of the House.

Waters has vowed to reinforce Dodd-Frank and protect the Consumer Financial Protection Bureau, while pursuing bills to bolster the supply of affordable housing, if she takes control of the panel. She also has proposed a bill to dismantle major banks that are consistently penalized for abusing their customers, citing Wells Fargo as a prime culprit.