WASHINGTON (Reuters) – Many Wall Street banks’ favorite lawmakers were returned to Congress overnight, boding well for the industry which has been trying to rebuild a broad base of bipartisan support a decade after the financial crisis tarnished its image in Washington.
While the outcome of the presidential election and many Congressional races remained unclear early Wednesday, the composition of key banking committees in the House of Representatives and Senate should remain largely intact, ensuring some continuity for the industry next Congress.
These committees take the lead on financial services legislation, oversee the country’s top financial regulators, and can conduct investigations into the industry. Their members range from industry allies to fierce, outspoken adversaries.
All members of the Democrat-led House Financial Services Committee were up for re-election. Committee chair Maxine Waters easily won, as did Rep. Patrick McHenry, who is expected to resume his role as the top Republican on the panel.
Though often a bank critic, Waters is seen by the industry as a pragmatist who is willing to work across the aisle.
Other members of the House panel who were returned to their Congressional seats with the help of industry backing include Republicans Andy Barr, French Hill, Ted Budd and moderate New Jersey Democrat Josh Gottheimer.
Which party will control the Senate remained unclear early Wednesday, but Republicans had succeeded in fending off Democratic challengers in several close competitions. If Republicans retain control of the Senate, leadership of the influential banking panel could fall to Pennsylvania Senator Pat Toomey, a major proponent of free markets.
Four Democrats and six Republicans on the panel were up for re-relection, four of whom ran tough races. Thom Tillis, an industry ally and the top recipient of banking industry cash among Senate Republicans held a slight lead in a race too close to call in the early hours of Wednesday, as did Senator David Perdue, another Republican bank ally.
Democratic Senator Mark Warner, a senior moderate who backed legislation easing small bank rules in 2018, won his race.
REBUILDING THE CENTER
The banking industry has tried over the past two years to rebuild the bipartisan support it enjoyed in Congress before the 2008 bailout turned many Democrats against it. That strategy has involved backing moderates in both parties.
The American Bankers Association (ABA), the country’s largest bank group, for example, began running independent ads supporting lawmakers for the first time during the 2018 mid-terms, and backed 14 candidates during the 2020 campaign.
They included Gottheimer, Hill, Tillis, Budd and Barr, as well as Republican Senator Cory Gardner, who has backed an industry campaign to make it possible for banks to service cannabis-related companies in states where the drug is legal. Gardner lost his reelection bid in Colorado to Democrat John Hickenlooper.
The ABA also ran ads backing Rep. Greg Stanton, an Arizona Democrat seen by Washington insiders as another business-friendly lawmaker. Stanton also received an endorsement from the U.S. Chamber of Commerce, the nation’s largest business lobby. Stanton won his race.
“In this election year, we continued to expand our political engagement on behalf of candidates in both parties who understand and appreciate the critical role banks of all sizes play in the economy and in their communities,” said Rob Engstrom, the group’s chief political strategist.
Industry campaign donations have also grown more bipartisan, according to data from the Center for Responsive Politics.
In the 2020 election cycle, campaign contributions from commercial banks and their workers to Republicans and Democrats running in congressional races are split nearly evenly, at $14 million and $13.6 million respectively.
That is a significant shift from four years ago, when Republicans pulled in $18.9 million from the industry, nearly twice as much as Democrats.
Reporting by Pete Schroeder