Gary Gensler in 2013.
Photographer: Andrew Harrer / Bloomberg
Photographer: Andrew Harrer / Bloomberg
President-elect Joe Biden has chosen a pair of veteran regulators backed by progressive Democrats to lead two key Wall Street watchdogs, signaling that his administration is planning tough surveillance after four years of light policies under the name President Donald Trump.
Former chairman of the Commodity Futures Trading Commission, Gary Gensler, will be appointed to lead Securities and Exchange Commission and Federal Trade Commission member Rohit Chopra is seconded to lead The Office for Consumer Financial Protection, according to people familiar with the decision.
The election follows weeks of intra-party fighting over financial regulation positions between moderate Democrats and those on the left wing of the party who want to see a sudden deviation from the favorable business policies advanced during the Trump administration. This is bad news for the banking industry, which is preparing for the prospect of stricter rules since Biden was elected in November.
Gensler, 63, is a former man Partner Goldman Sachs Group Inc., which earned its reputation as a scourge on Wall Street when it engaged in bruising battles while advancing the regulation of derivatives 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 candidates will be subject to Senate confirmation, and the SEC and CFPB will likely be under interim leadership until this process is completed.
The chances of Gensler and Chopra winning the confirmation were significantly helped by Democrats who won two Georgia Senate elections this month, resulting in a 50-50 split. The incoming vice president, Kamala Harris, will support the vote to eliminate equality if all Republicans oppose Biden’s financial watchdogs. This could nullify any efforts by the powerful banking lobby to block Gensler and Chopra, whose nominations will be submitted to the Senate Banking Committee.
Photographer: Alex Edelman / Bloomberg
If confirmed, Gensler would take over the management of an agency that some Democrats say has become too comfortable with the banking industry. He should immediately address market disruptions stemming from the coronavirus pandemic and the escalation of the US fight with China over public company audits.
Democrats expect Gensler to work harder and impose fines on financial firms and executives accused of wrongdoing. It will also face pressure to push companies to disclose policy spending, climate change risks and diversity and inclusion.
Progressives will seek out Chopra to revive a CFPB that he says has become a toothless version of the agency he helped Warren create. In his first internship at the agency, he held the position of student loan lawyer. This experience could be useful if it wants to fulfill Biden’s promise to repress private creditors who mislead borrowed students.
The Warren-aligned Progressive Change Campaign Committee said the Chopra selection was “a great gain for consumers and a sign that executive power will be used to achieve tangible results for the American people.”
– With the assistance of Robert Schmidt
(Updates with chances of Senate confirmation starting with the sixth paragraph)