Democrats take Senate, portending changes ahead

(Jan. 8, 2021) The election of two Democrats from Georgia to the U.S. Senate this week – giving the Democrats a slim majority and therefore control — means some changes ahead in policy and, likely, to at least two regulatory agencies.

Once newly elected Sens. Raphael Warnock and Jon Ossof are seated (following certification of their elections, likely late this month), the Democrats will take control of the Senate. That will open the door to Democrats capturing the chairs of Senate committees – including the Senate Banking Committee, which writes the laws affecting credit unions and other financial institutions. Sen. Sherrod Brown (Ohio) is now the ranking Democrat on the committee and will likely be elected chair.

Brown, over the last several years as ranking minority party member of the committee, has been sharply critical of financial institution regulatory relief efforts. This week, for example, he vilified in a press release the recommendations of the CFPB’s task force on consumer law. “From the outset, it was clear that the CFPB’s Taskforce on Federal Consumer Law was just a pretext to gut regulations and protections for consumers,” he stated. “The Taskforce members have a history of undermining the CFPB and work at law firms representing payday lenders, banks, and other corporations with a direct, financial interest in rolling back consumer protections.”

The Democrats’ control of the chamber likely also dooms the nominations for a Federal Reserve governor and a permanent comptroller of the currency. On Jan. 3, President Donald Trump (with 17 days left in office) re-nominated Judy Shelton as a Fed governor, and Brian Brooks as comptroller (Brooks now serves as acting comptroller). Those nominations are unlikely to be considered between now and Jan. 20, when President-elect Joe Biden will be inaugurated, as the Senate is in recess through Jan. 19. Biden will likely withdraw the nominations after taking office – and, even if he didn’t, the Democrat-led Senate is unlikely to ever take them up.