Corporate & Securities Law

Heard on Capitol Hill

TOTM bloggers get a chance to work with regulators and Hill staff from time to time, so I thought periodically updating our readers on the prevailing gossip may be of interest.  Here’s the latest on what the November elections may mean for financial regulation.

Alabama has recently dominated the Republican side of the financial regulation committees on the Hill, with Senator Shelby and Representative Bachus serving as Ranking Members for the last few years, but that may change if the rumors are true.  Interest groups and staffers are wondering whether Rep. Spencer Bachus will gain the Chairmanship of the House Committee on Financial Services if the House changes hands this November.  John Boehner tried to oust Bachus last year, but he didn’t manage to get the votes in the Caucus to make it happen.  Whether such a challenge will be viable after November will depend on how members of the Republican Caucus steering committee gauge his performance in fighting against financial reform this year.  (And if you think that good feelings about taking over the House will make members rally around their leaders, think again.  Don’t forget how Seth Waxman won a challenge against the long serving John Dingell for the Chairmanship of House Energy two years ago.)

The rumor is also going around that Senator Shelby may decide to step down as Ranking Member at the Senate Committee on Banking, Housing and Urban Affairs.  If he does, the next two members who would have been in line will also be absent…Robert Bennett from Utah was picked off by the Tea Party and Jim Bunning from Kentucky decided to bow out in the face of bad polling.  That would make Senator Mike Crapo the new Ranking member.  Senator Crapo took the lead on the corporate governance side of financial regulation reform this year and did what I believe was an amazing job in the face of impossible odds, ensuring that most of the costly ideas in Senator Schumer’s “Shareholder Bill of Rights” did not make their way into the Dodd-Frank Act.  If the Senate changes hands in November, which I think is unlikely, it may be expected to delay Senator Shelby’s retirement.

Whoever is in charge, the policy agenda is clear.  It will all be about Fannie and Freddie.  The fireworks will be fun to watch either way.

Full post as published by Truth on the Market on September 12, 2010 (boomark / email).