Updated Saturday, April 19, 2014 as of 1:06 PM ET
- Bank Channel
5 Post-Election Questions on Bank Policy
by: Rob Blackwell and Joe Adler
Thursday, November 8, 2012
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The Treasury Department, meanwhile, outlined three vague options for reform in 2011 and then declined to say which one it preferred. Geithner promised more details on a plan last spring, but never followed through. Since he is on the way out, it's unclear when the issue will be addressed.

"There's no mandate from this election to do anything about Fannie and Freddie," said Jaret Seiberg, a managing director at Guggenheim Partners. "It's almost impossible to see quick action by the Congress and the White House."

4. Does Dodd-Frank implementation speed up?

Although regulators claim not to be caught up in presidential politics, many observers argue the banking agencies have been holding off on finalizing controversial provisions of Dodd-Frank until after the election.

The Consumer Financial Protection Bureau, for example, has repeatedly delayed finalizing a rule defining "qualified mortgages" that would be exempt from a requirement that lenders to ensure borrowers have the ability to repay a loan.

Regulators are widely expected to move forward shortly on many outstanding issues, including QM, its sister regulation defining "qualified residential mortgages" and the Volcker Rule ban on proprietary trading.

"What we have from this election is a reinforcement of the Dodd-Frank Act, and that we will continue down this path," said Boltansky. "It means we will have the full enactment of Basel III, it means we'll have the finalization of the Volcker Rule, it means this year we're going to have QM and QRM done. ... We were going down a road yesterday and there was an exit off of the Dodd-Frank rulemaking highway. Americans decided to stay on the highway."

But others are hopeful that freed from campaign politics the administration may encourage regulators to dial back on certain regulations for fear they could harm the economy.

"Reelection could give them the benefit of perhaps recognizing unintended consequences and adapting accordingly," said John Bowman, a partner at law firm Venable and former acting director at the Office of Thrift Supervision. "I don't know that implementation will speed up. The issues that are still out there are very complicated. There are a number of consequences that I think the regulators, and hopefully various people on Capitol Hill, are coming to appreciate are going to have unintended results."

Mark Calabria, director of financial regulation studies at the Cato Institute, agrees that the administration now has more flexibility to take a closer look at some of the implications of various rules.

"Obama's reelection is an affirmation of healthcare [reform and] Dodd-Frank," Calabria said. "I think Democrats think these things are secure enough you can move from defensive posture to how do we make things work."

5. Can Democrats and Republicans work together?

While the Senate Banking Committee keeps its chairman, Tim Johnson, the other three leadership spots on the House and Senate banking panels are all expected to change hands.

Sen. Mike Crapo, R-Ida., isexpected to succeed Sen. Richard Shelbyas the banking panel's lead Republican. That may bode well for cross-the-aisle cooperation as Crapo is seen as more low-key than Shelby. Observers have predicted that Crapo and Johnson are likely to get along, considering both are from states with a significant number of small banks.

The situation in the House Financial Services Committee, however, is potentially more volatile. Rep. Jeb Hensarling, the outspoken free-market conservative from Texas, is expected to chair the committee, while Rep. Maxine Waters, the liberal stalwart from California, is likely to be the panel's chief Democrat.

While Waters has already said she would like to cooperate with Hensarling, many observers wonder if that is possible.

"On the one hand, I think they are going to work together better than people expect, because I think the expectation is quite low," said Calabria. "Neither one of them would be described as a moderate. Both can be combative, both can be very strong willed. You can certainly expect some clashes, but on the other hand I actually expect a fair amount of cooperation then I think people would expect."

Victoria Finkle and Donna Borak contributed to this article.

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