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The influential Senate Banking Committee will be getting a new chairman in Ohio Democrat Sherrod Brown, who said that his top priorities for Wall Street will be focused on addressing systemic racism and climate change.
“We’re going to view everything we do through the dignity of work and through a climate lens and through a racial justice lens,” Brown told reporters on Tuesday.
With the Democrats taking on a narrow majority in the Senate, Brown will take the top seat on the committee with Pennsylvania Republican Pat Toomey, who will lead the minority side of the committee.
Brown did not elaborate on specifically how he would pursue legislation targeting his priorities, but said he has asked prospective nominees with administration roles to consider their roles in assessing climate risk. Reuters reported Tuesday that the Biden administration will pick Gary Gensler to head the Securities and Exchange Commission, which could have a hand in crafting disclosure requirements on climate change-related matters.
Regulators like the Federal Reserve have already floated the idea of improving transparency within the banking industry on how they price climate risks.
On racial justice, Brown noted that financial firms have shown greater interest in acknowledging the racial economic gap but said he would like to see a regulatory system that “will lead them maybe a little more rapidly in that direction.”
Brown said calling Wall Street CEOs to testify on Capitol Hill is a possibility, expressing a desire to question the big banks over “huge” CEO payouts and executive compensation.
But in the early days of the Biden administration, Brown said his main priority will be COVID-19 relief.
“The first priority is COVID and doing what we need to do to grow this economy,” Brown said.
Outlook on bank regulation
Brown was a staunch opponent of reforms made under current committee chairman Mike Crapo, a Republican from Idaho who drove efforts to pare back some Obama-era regulations installed after the Great Financial Crisis.
Under the Trump administration, the GOP and some moderate Democrats in 2018 were able to pass a bill rolling back portions of the Dodd-Frank Act. Among the many changes: freeing many banks from Volcker Rule restrictions on proprietary trading.
Brown said he does not plan on revisiting that bill, but will look at the implementation of regulatory changes made over the last few years.
That scrutiny could include the additional regulatory tweaks that the Fed put in place under Trump-appointee Randal Quarles.
As the Fed’s vice chairman of supervision, the Fed reduced liquidity and funding requirements on large super-regional banks like U.S. Bancorp (USB), PNC Financial (PNC), Capital One (COF), and Charles Schwab (SCHW).