One thing the election made clear: Boston’s large financial industry should not expect a reprieve from tougher rules, dashing hopes that a new president and Congress would rewrite the Dodd-Frank law or eliminate the Consumer Financial Protection Bureau.
“The status quo remains,” said Scott Talbott, senior vice president for government affairs at The Financial Services Roundtable, which represents major financial firms.
Indeed, Elizabeth Warren — the Harvard professor who helped create the consumer agency — was elected to the US Senate. With Democrats still controlling the Senate, she would be in a strong position to claim a seat on its banking committee and serve as a powerful bulwark against efforts to weaken theregulations or eliminate the bureau.
But most of Dodd-Frank has yet to be implemented, giving financial firms more opportunities to lobby regulators to reduce its impact. It’s also possible that lawmakers could agree to tweak some aspects of the law, especially since the main authors will not be part of the new Congress.
“I think everybody on the planet — with the exception of Barney Frank — will tell you the law needs material revisions,” said Cornelius Hurley, director of the Boston University Center for Finance, Law & Policy.
In addition, many key presidential advisers are expected to step down at the end of Obama’s first term. Among them is Treasurer Secretary Timothy Geithner, who had a longstanding relationship with leaders of the financial industry. But because neither party has 60 votes in the Senate, it is likely that President Obama will have to work with Republicans and Democrats to win confirmation for Geithner’s replacement and other key appointments.