President-elect Joe Biden has picked a pair of veteran regulators strongly backed by progressive Democrats to lead two key Wall Street watchdogs, signaling that his administration is planning tough oversight after four years of light-touch policies under appointees of President Donald Trump.
Former Commodity Futures Trading Commission Chairman Gary Gensler will be nominated to lead the Securities and Exchange Commission and Federal Trade Commission member Rohit Chopra is being tapped to lead the Consumer Financial Protection Bureau, Biden’s transition team said Monday.
“Our administration will hit the ground running to deliver immediate, urgent relief to Americans; confront the overlapping crises of COVID-19, the historic economic downturn, systemic racism and inequality, and the climate crisis; and get this government working for the people it serves,” Biden said in a statement to Bloomberg News. “These tireless public servants will be a key part of our agenda to build back better — and I am confident they will help make meaningful change and move our country forward.”
The selections follow weeks of intra-party wrangling over the financial regulation posts between moderate Democrats and those on the party’s left wing who want to see a sharp departure from business-friendly policies advanced during the Trump administration. They are bad news for the banking industry, which has been bracing for the prospect of stiffer rules since Biden was elected in November.
Gensler, 63, is a former Goldman Sachs Group Inc. partner who gained a reputation as a Wall Street scourge when he engaged in bruising battles while advancing derivatives regulation 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 she ran for office.
Both nominees will be subject to Senate confirmation, and the SEC and CFPB are likely to be under interim leaders until that process is completed.
The chances of Gensler and Chopra winning confirmation were helped significantly by Democrats winning two Senate runoff elections in Georgia this month, resulting in a 50-50 split. The incoming vice president, Kamala Harris, will hold the tie-breaking vote should all Republicans oppose Biden’s financial watchdogs. That could nullify any efforts by the powerful banking lobby to block Gensler and Chopra, whose nominations would go before the Senate Banking Committee.
If confirmed, Gensler would take charge of an agency that some Democrats say has grown too cozy with the banking industry. He would immediately need to address market disruptions stemming from the coronavirus pandemic and the escalating U.S. feud with China over public company audits.
“Gary Gensler is a proven champion of regulatory reform and brings deep expertise in the markets,” former SEC commissioner Robert Jackson said in a statement. “The SEC and the Nation will benefit from his wisdom and leadership,” said Jackson, who had been considered a candidate for the agency’s top job.
Democrats will expect Gensler to push for tougher enforcement and bigger fines for financial firms and executives accused of wrongdoing. He will also face pressure to push companies to disclose political spending, climate-change risks and diversity and inclusion.