| Ed Hill is a Partner at FTP and a recognized expert in financial services policy and advocacy. With over 30 years of experience in the field, he advises and works with clients who have policy issues before Congress and financial regulators. Most recently, Ed served as Senior Vice President and Head of Government Affairs for the Bank Policy Institute. In that role, he helped lead BPI’s federal advocacy efforts on member company priorities, including those in capital and liquidity, consumer banking, technology, and national security. Kelley Williams is a Partner at FTP. She handles a diverse portfolio of issues, but her specialty is in financial services, insurance, and banking. She also lobbies on transportation, telecom, fintech, and energy issues for the firm’s clients. In her 15 years as a senior government relations professional, she has successfully demonstrated an ability to craft and implement complex legislative strategies for her clients while leveraging relationships and resources across multiple sectors. |
Question –
How will the new Congress address potential regulatory reforms to the financial system?
Newly elected Chairs of the House Financial Services Committee and Senate Banking Committee, Rep. French Hill (R-AR) and Senator Tim Scott (R-SC), have committed to pushing policies to reduce the regulatory burden to free all segments of the financial sector to serve their customers better. Several areas of regulatory burdens that the two Chairs may address include streamlining the bank merger process so that smaller institutions can build scale to better compete, reducing the burden for emerging companies seeking to access public markets, and focusing on streamlining efficiencies in housing programs.
Question –
Will financial regulators modernize regulation of emerging technologies, particularly in regulating digital assets, fintech companies, and ensuring privacy safeguards for consumers?
The regulators appointed by President Joe Biden were quite active. The CFPB proposed or finalized regulations addressing Earned Wage Access, Buy Now Pay Later, large market participants such as PayPal, Apple, and Zelle, and open banking intended to give consumers greater access to their data. Further, bank regulators placed new requirements on the banks looking to engage in “novel activities,” including certain crypto activities. The SEC has also made it harder for certain crypto activities to be conducted by both crypto-native firms and traditional financial institutions.
New regulators appointed by President-elect Donald Trump will look to roll back many of these and, where possible, provide greater regulatory certainty to promote innovation. This is particularly true for digital asset companies which have sought greater regulatory clarity for their products.
Question –
Will reform of the Government-Sponsored Enterprises (i.e., Fannie Mae and Freddie Mac) be tackled in the next two years?
With a united Republican government, the likelihood of GSE reform increases, but other factors at play may prove a challenging environment to finally remove the GSEs from conservatorship. For one, this is an incredibly thorny issue that has eluded even previous bipartisan attempts at reform. Further, each party has different objectives (i.e., increasing affordable housing/the government playing less of a role in the housing market), and with a slim majority in the House, this could prove an insurmountable obstacle.
The current discussion about how to sequence reconciliation and what may be used as a pay-for, could ultimately fast-track a process that needs considerable thought and cooperation to ensure no adverse effects on an already tenuous housing market.