Biden’s SEC pick, former Commodity Futures Trading Commission Chairman
That means he not only knows how to mobilize a bureaucratic federal agency but also understands the often impenetrable ways that Wall Street makes money -- and how firms use that complexity to turn regulation in their favor.
His top targets likely will include Chinese companies that list on U.S. stock exchanges while bypassing American regulations, the surge in trading by neophyte investors during the coronavirus pandemic, cryptocurrencies and pushing Corporate America to reveal more about workforce diversity and how climate change impacts bottom lines.
Biden’s pick for the consumer agency,
Chopra also is an acolyte of Senator
The pending nominations send a clear signal that the rule-cutting and lax enforcement that Wall Street has grown accustomed to during four years of President
Robinhood and SPACs
Robinhood, with its popular smartphone app, rode a wave of Covid 19-fueled day trading to add millions of customers. But critics say the company represents a disturbing trend of brokerages encouraging less-sophisticated investors to take risks that they don’t understand -- and Gensler is likely to face pressure from progressives to erect new guardrails.
Robinhood has disputed claims that its platform promotes a “gamification” of trading as an inaccurate depiction of its business, saying its goal is to “democratize” wealth creation and investing by enabling a new class of consumers to trade shares and other assets.
Critics, including former SEC Chairman
There’s another concern that the Robinhood-led boom in retail trading is inflating a stock bubble that could pop, triggering steep losses for investors -- something that also worries progressives.
Volcker Rule and Private Equity
After the 2008 financial crisis, Gensler solidified his status with progressives by insisting on a tough version of the Volcker Rule. The regulation, which banned proprietary trading by Wall Street banks, was eased during the Trump administration. Goldman and other firms will now be watching to see whether Gensler leads an effort among regulators to bolster its restrictions.
Another area in which Gensler is likely to square off with big names in finance is over the SEC’s approach to regulating
A Crackdown on Chinese Stocks
One area that will demand Gensler’s attention is rising tensions between the U.S. and China -- fighting that is now being waged in financial markets.
Congress passed legislation late last year that could lead to
At issue are longstanding American requirements that all publicly traded companies in the U.S. allow their auditors to be inspected by
The crackdown would follow a separate one already initiated by the Trump administration, which issued an executive order in November that requires American investors to sell their stakes in Chinese companies deemed a threat to U.S. national security.
New Rules for Crypto
He’s quite familiar with the industry, having taught a class about it at the
Some in the industry argue that more oversight wouldn’t necessarily be a bad thing because, right now, many institutional investors shy away from the space, as they see it as akin to the Wild West. As a result, stiffer rules might bring more capital flows to digital tokens.
Environment and Diversity
Progressives have long contended that the SEC should have just as strong a role in responding to climate change as more obvious agencies such as the
A change at the top of liberals’ wish list is for the SEC to require public companies to boost disclosures of how a warmer planet and less-reliance on fossil fuels could impact profits, a move that could hit oil companies particularly hard.
Gensler could show he’s serious about such concerns by prioritizing whats known as environmental, social and governance investing, or ESG. One way he may do that is by establishing a new SEC office that’s dedicated to ESG issues.
The diversity of C-Suites and public companies’ employees is also a top focus for progressives, who want the SEC to force businesses to disclose more information on race and gender.
Chopra’s Quick Fix
One reason Chopra was picked for the
Since he already holds a Senate-confirmed post as a Democratic member of the
While an official nod from the Senate is likely with Democrats poised to take control of the chamber, the several weeks or months it might require for confirming a CFPB chief is much longer than progressives are willing to wait.
The regulator’s shift under Trump has been impossible to miss. Since the outgoing president’s appointees took over in late 2017, it has imposed just a single fine against one of the U.S.’s six largest banks -- a $500 million penalty against scandal-ridden
Banks from Wall Street to Main Street are expecting the CFPB to review the controversial -- and lucrative -- practice of lenders penalizing depositors when they spend money that they don’t have in their accounts. Known as overdraft fees, such charges generate some $12 billion annually for U.S. banks.
Consumer advocates also want Biden’s incoming CFPB chief to bring back an Obama-era rule that required payday lenders to assess prospective borrowers’ abilities to repay their loans.
Companies that provide short-term credit such as
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