Next Tuesday, Nov. 4, is an important election day for the future of our country, a day of historic determination. Control of the U.S. Senate will be determined for the next two years and, probably, for several years thereafter. It currently is controlled by Democrats, but is now up for grabs. By contrast, the U.S. House of Representatives is controlled by Republicans, who will continue to control it, according to political pundits. The future of the Senate is critical, from a banking standpoint. As a whole, the Democrats currently serving have not shown a willingness to forward regulatory relief that might help banks better serve their customers. They seem to have adopted the Dodd-Frank Act as inviolable.
Consider the evidence. Only three regulatory relief bills have been passed out of the Senate Committee on Banking, Housing & Urban Affairs in this legislative session, which is now nearly two years old. Yet the House Committee on Financial Services has passed over 25 bills dealing with various aspects of regulatory relief. Because of this reform record, banker groups across the nation are largely supporting Republicans in federal races this election year.
While there are about 10 elections across the nation that will determine Senate control, most pundits peg the races in Iowa and Colorado as the two most decisive. In addition to the aforementioned banking issues, these two races bring forth yet another battle of industry adversaries — banks versus credit unions. In Colorado, Sen. Mark Udall has been the darling of the credit union industry, authoring and promoting numerous bills on behalf of credit unions. In appreciation, last week the associations that represent credit unions contributed $400,000 to his re-election effort. His challenger, Congressman Cory Gardner, is not a supporter of credit union expansion, and he does support regulatory relief for banks and other businesses. Mr. Gardner has been singled out for support from the Friends of Traditional Banking (FOTB). It is impossible to determine how much financial support FOTB might ultimately provide to him, but this organization selects only two races each election.
In Iowa, the race is for an open seat that has previously been held by a Democrat. The candidates are Democrat Bill Braley, currently a member of the U.S. House of Representatives, who has been a friend to credit unions for many years. His opponent, Joni Ernst, who retired after 22 years of military service, shares the same philosophies as Cory Gardner. Ms. Ernst is the other candidate that FOTB is supporting.
Both of these races will be closely watched throughout election night as harbingers of who will control the Senate. Banking lobbyists and supporters will be keenly honed in on these two races, hoping both for regulatory relief and for constraints on further credit union powers expansion. Few times in my career has an election so crystallized issues of interest to bankers. I know that I will be watching to see how the balance of power will be determined by voters — just as the framers of the Constitution envisioned.
– S. Joe DeHaven