Gary Gensler in 2013.
Photographer: Andrew Harrer / Bloomberg
Photographer: Andrew Harrer / Bloomberg
President-elect Joe Biden has selected a pair of veteran regulators strongly backed by progressive Democrats to lead two key Wall Street watchdogs, indicating that his administration plans to tighten scrutiny under President Donald Trump’s appointees after four years to keep.
Former Chairman of the Commodity Futures Trading Commission Gary Gensler will be nominated to the Securities and Exchange Commission and Federal Trade Commission member Rohit Chopra is wiretapped every Consumer Financial Protection Bureau, according to people familiar with the decision.
The selections follow weeks of squabbling within the parties over the financial regulation posts between moderate Democrats and those on the left wing of the party who want to see a sharp departure from the business-friendly policies developed during the Trump administration. They are bad news for the banking sector, which has braced itself for the prospect of tougher rules since Biden was elected in November.
Gensler, 63, is a former Goldman Sachs Group Inc., a partner who gained a reputation as a Wall Street scourge while engaged in bruising while promoting derivatives regulation at the CFTC during the Obama administration. Chopra, 38, is an acolyte of Massachusetts Senator Elizabeth Warren who helped her set up the CFPB before running for office.
Both nominees will be subject to Senate confirmation and the SEC and CFPB will likely be under interim leaders until that process is completed.
The chances of Gensler and Chopra winning the confirmation was significantly increased as the Democrats won two second Senate elections in Georgia this month, resulting in a 50-50 split. Upcoming vice president, Kamala Harris, will hold the tie-breaking vote if all Republicans oppose Biden’s financial watchdogs. That could nullify any attempts by the powerful banking lobby to block Gensler and Chopra, whose nominations would go to the Senate Banking Committee.
Photographer: Alex Edelman / Bloomberg
If confirmed, Gensler would take charge of an agency that some Democrats say has gotten too cozy with the banking sector. He should immediately address market disruptions resulting from the coronavirus pandemic and escalating US feud with China following audits of public companies.
Democrats expect Gensler to push for tougher enforcement and higher fines for financial companies and executives accused of misconduct. He will also come under pressure to push companies to disclose political spending, climate change risks and diversity and inclusion.
Progressives will ask Chopra to revive a CFPB that they say has become a toothless version of the agency he helped Warren create. In his first stint at the bureau, he was the student loan ombudsman. That experience could come in handy if he wants to keep Biden’s promise to crack down on private lenders who mislead student borrowers.
The Warren-tuned Progressive Change Campaign Committee said Chopra’s selection was “a major win for consumers and a sign that executive power will be used to deliver tangible results for the American people.”
– With the help of Robert Schmidt
(Updates with Senate confirmation chances from the sixth paragraph)