It's a week since the midterm elections results were declared and the Democrats took over the House of Representatives. Now, come January 2019, the House Financial Services Committee, which oversees the United States banking system, is also likely to get a new Chair in the form of Rep. Maxine Waters (D-California).
A vocal critic of the current administration, Waters is expected to get tough on big banks calling for more regulations on financial institutions. Right after the elections, Waters released a statement indicating that she would make it a key priority to ensure “that [the Bureau of Consumer Financial Protection] can be allowed to resume its essential role of protecting consumers from harmful practices without interference from the Trump Administration.”
This could put her on a course to butt heads with BCFP Acting Director Mulvaney, or his appointed successor, Trump nominee Kathy Kraninger, assuming she is confirmed (which is likely with a Republican-controlled Senate).
Waters also said that the House Financial Services Committee would work to protect consumers from fraud and predatory lending. While the BCFP has been working in tandem with the mortgage industry by soliciting input from practitioners and creating an environment where qualified borrowers got a better chance to secure a loan, “a return to more of an ‘enforcement’ mentality could cause the pendulum to swing back once again.
According to a report in The Columbian big banks and their executives are also more likely to be called to testify in front of the Congress under Waters' leadership. Even while legislation related to tightening the controls on banks are not very likely to be turned into law with a Republican-controlled Senate, the article said that it was also "much less likely that any substantial new deregulatory bills get through, either."
For now, all eyes will be trained on how a bluer House acts when it comes to key housing policies and regulation.
Read more about how the midterm elections have impacted housing: