U.S. Financial Regulatory Week Ahead

Nov 24

SEC Chair Gensler Makes It Official He’s Leaving As Is SEC Commissioner Lizarraga, Washington’s Favorite Parlor Game of Who Gets What Goes Full-Throttle, and Congress Makes Final, Half-Hearted Efforts at Crypto and Cannabis Legislation

November 25 - 29, 2024

Well, we made it to Thanksgiving week and wish everyone a restful, happy week ahead. In Washington, it will be officially dead quiet but unofficially incredibly active as Nation’s Capitol’s favorite parlor game – Who is Getting Which Nomination? – is at full throttle. Individuals and innumerable interest groups are furiously lobbying the Trump transition team behind the scenes to get their favorite candidate named to key regulatory and administration posts.

The biggest prize for the moment is who will be named Chair of the Securities and Exchange Commission. This past week, Chair Gary Gensler made it official by announcing he would step down on January 19, the day before the presidential inauguration. There will also be another opening at the SEC, as Commissioner Jamie Lizarraga surprised observers by announcing he would step down on January 17.

A number of outstanding candidates are being mentioned as the likely SEC Chair nominee, most notably former SEC Commissioner Paul Atkins (full disclosure: Paul is a friend and former colleague—we served together at the SEC under then-SEC Chair Richard Breeden). Other names mentioned are other SEC alumni, such as Brad Bondi and Norm Champ.

Over at the besieged Federal Deposit Insurance Corporation, embattled Chair Marty Gruenberg announced he, too, will step down on January 19. But unlike Gensler, his announcement was blasted by incoming Senate Banking Committee Chair, Senator Tim Scott (R-SC), who – like most Republicans on Capitol Hill – wants him to step down now for his role in the scandals at the agency outlined by the various reports. Scott said: “I’ve called on Martin Gruenberg to resign from the agency for almost a year – yet he’s continued to play politics at the expense of the FDIC’s employees. This announcement is long overdue, but Chairman Gruenberg’s decision to remain in office until the last minute demonstrates his failure to accept accountability for his actions.”

No word yet on the thinking of the heads of the Consumer Financial Protection Bureau, Rohit Chopra, or Commodities Futures Trading Commission Chair Rostin Behnam. Federal Reserve Vice Chair for Supervision Michael Barr has said he intends to stay.

There were four policy-related events of note this past week: First, Senate Agriculture Committee Chair Debbie Stabenow (D-MI) let it be known she is working to finalize a last-minute deal on cryptocurrency legislation. Our view: This is a waste of time and effort, as there is no time or appetite among Republicans to try to rush a bill through before the end of the year.

Second, Senate Majority Leader Chuck Schumer (D-NY) wants to push a cannabis banking reform measure in one of the year-end budget extension bills. Again, like the Stabenow crypto effort, it has virtually zero chance of success.

Third, in testimony before the House Financial Services Committee, Fed Vice Chair for Supervision Michael Barr said efforts to finalize any major bank rules before President-elect Trump takes office will not be finalized – including a much-battled over bank capital rule.

Fourth, a federal court struck down the SEC’s regulatory overhaul of the U.S. Treasury deal rules—a major blow to SEC Chair Gensler’s long-time efforts to redesign the Treasury marketplace. This is the third federal court decision this year striking down Gensler-led rulemakings.

As we pointed out above, it will be a very quiet week in Washington this week – just a few interesting think tank and trade association events – you skip to the bottom to read all about them.

Happy Thanksgiving, everyone! Please let us know if you have any questions.

U.S. Congressional Hearings

U.S. Senate

· The Senate is out of session this week for the Thanksgiving holiday.

House of Representatives

· The House is out of session this week for the Thanksgiving holiday.

Federal Department & Regulatory Agency Meetings & Events

Federal Reserve Board and Federal Reserve Banks