Wall Street has a lot to lose -- or potentially gain -- in a handful of political races voters will decide next week.
Democrats need to pick up at least four seats to take control of the Senate. Republicans maintaining majorities in both the Senate and House would be the finance industry’s best defense to keep dogged bank antagonists like Elizabeth Warren at bay. A Democratic majority in the Senate could give Warren and other progressives more sway in appointing tough financial regulators and pushing aggressive rules for banks, hedge funds and asset managers.
Adding to banks’ anxiety this election season is Wells Fargo & Co.’s bogus account scandal. It has put lenders on the defensive even more than they already were in Washington and reinvigorated calls on the campaign trail to punish firms and executives for alleged misconduct.
The industry has spent millions of dollars to help re-elect lawmakers who sit on key Senate panels that shape financial and tax policy, and decide who is appointed to crucial posts at the Treasury Department and Securities and Exchange Commission.
Regardless of whether Donald Trump or Hillary Clinton wins the presidency, the party that controls the Senate will likely have a slim majority. That makes every lawmaker’s vote consequential in determining regulatory jobs. Wall Street is laser focused on regulators because government agencies have been where most big battles over the Dodd-Frank Act have been fought in recent years. With Congress gridlocked, few major bills have been passed that impacted the finance industry since Dodd-Frank’s 2010 approval.
Here’s a snapshot of some of the candidates who could have big consequences for Wall Street.
Pennsylvania -- Pat Toomey
The most expensive U.S. Senate race in history is unfolding in Pennsylvania, where at least $139 million has been spent by Wall Street, unions, billionaires and other contributors. Toomey, a former derivatives trader, sits on both the Senate Banking Committee and Senate Finance Committee, which oversee banks and tax policy, respectively. If he fails to beat Democrat Katie McGinty, the industry will lose someone it considers an ally in vetting Treasury and SEC appointments.
Toomey has a track record of advocating for policies aligned with financial firms’ interests. He sponsored legislation passed in 2014 that eased some rules for the derivatives industry, also known as swaps-pushout. He also introduced a bill that seeks to overturn tougher requirements for the money-market fund industry intended to curb risks that contributed to the 2008 financial crisis. The money-market rule is one that some firms have spent years and millions of dollars lobbying to reverse.
Employees from banks, hedge funds and private equity firms have given about $4.6 million to Toomey’s campaign and two allied committees, making him one of the top Senate recipients of funds from the finance industry this year.