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ABA releases analysis of election’s impact on financial regulatory climate

Jeb Hensarling

The American Bankers Association’s government relations division has released an analysis of how the recent election will influence key banking regulations.

“This election was one of the most important for the banking industry in modern times,” the ABA said. “As is the case with most informed Americans, bankers remain concerned with the difficult issues our country faces on budget deficit, entitlement reform, tax policy and health care—issues that are already having a profound effect on economic growth.”

The analysis said that the House Financial Services Committee under Rep. Jeb Hansarling (R-Texas), who is set to replace Spencer Bachus as chairman, may push for changes to Dodd-Frank, though “wholesale changes are unlikely.”

“While changes to Dodd-Frank will have to compete for floor time with major issues that will have a higher priority, such as budget, tax and health care, there is a chance that some Dodd-Frank issues can be passed by both bodies,” the analysis said.

The ABA indicated in the analysis that it “would expect continued congressional support and possible legislative action” on rules to implement Basel III capital reforms.

Additionally, the ABA’s analysis said that since the Consumer Financial Protection Bureau is popular with the public, repeal is unlikely to pass and would be vetoed.

“More likely to be debated are some of the changes Republicans have been pushing in this Congress, including having a board rather than a single director, subjecting the CFPB to appropriations and increasing the ability of the prudential supervisors to address conflicts with the CFPB,” the analysis said.

The analysis indicated that Richard Cordray, the director of the CFPB, will likely stay on as head of the agency, though “Republicans may continue to block the appointment of a permanent director until their reforms are agreed to.”

The ABA added that the appointment of the Treasury secretary “is now more important than ever,” as the Treasury has become increasingly involved in bank regulation through the Financial Stability Oversight Council.

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