The House Financial Services Committee is poised to become must-watch television, at least by C-SPAN standards. Its new chair is Maxine Waters, one of President Trump’s most vocal critics, who is set to shift the committee’s focus from arcane banking and capital markets issues to some of the hottest political controversies of the day.
The California Democrat is specifically homed in on investigating acting White House chief of staff Mick Mulvaney for his tenure at the Consumer Financial Protection Bureau. She is also preparing to probe Trump’s financial dealings using the panel’s subpoena power.
At the same time, a large group of freshman Democrats, including high-profile progressive Rep. Alexandria Ocasio-Cortez of New York, will also compete for headlines — and push the agenda to the left.
Waters pledged in January to “undo the harm that Mick Mulvaney has done” to the CFPB, an agency that is the brainchild of Harvard-professor-turned-senator, Elizabeth Warren, D-Mass. Democrats created the CFPB to police mortgages, credit cards, payday loans, and other consumer financial products. Republicans have charged that the agency imposes too many regulatory burdens and lacks accountability. As acting director in late 2017 through 2018, Mulvaney pursued several changes meant to limit its authority over markets.
Now Waters wants to call Mulvaney before her committee, raising the possibility of an unusual spectacle: the White House chief of staff testifying under oath before hostile members of Congress.
[Related: Keeping OMB job opens White House chief Mulvaney to Democrat subpoenas]
Waters said in a mid-January speech at the Center for American Progress that she plans to introduce legislation to reverse many of the changes Mulvaney made during his time at the bureau, including his stripping the Office of Fair Lending and Equal Opportunity of enforcement powers.
“I think the first step is the oversight component because a lot of these decisions, or lack of decisions, have happened in the dark or with lack of transparency,” said Scott Astrada, director of federal advocacy for the Center for Responsible Lending, a nonprofit consumer group.
Other Trump administration policies could also receive a longer look from Democrats. The Office of the Comptroller of the Currency’s proposal to update regulations around the Community Reinvestment Act, a seminal anti-discrimination law meant to sway banks to open branches and lend in distressed neighborhoods and towns, received skepticism from Capitol Hill Democrats.
Ben Carson, Trump’s Housing and Urban Development secretary, is likely to face particular scrutiny. Waters has excoriated him for his department’s decision not to continue rental housing assistance contracts during the partial government shutdown.
As for the president himself, Waters has indicated that she will investigate his business connections to Deutsche Bank. The troubled German bank, which paid fines for anti-laundering law violations related to Russia in 2017, has loaned Trump’s business hundreds of millions of dollars since the late 1990s. Any investigation of the connections between the two, though, could be upended by special counsel Robert Mueller’s work, which is believed to include an investigation of the Trump–Deutsche relationship.
James Ballentine, executive vice president of congressional relations and political affairs for the American Bankers Association, said he expects the committee’s next two years to feature three sets of activities: One-third he expects to be oversight, one-third to be “partisan messaging” aimed at sating the Democratic base, and the final third to be legislation intended to be sufficiently acceptable to Senate Republicans and the administration to become law.
“I think it’s all going to be about management style,” said Ballentine. “Each chair has their style, and Ms. Waters will have her own style.”
Waters has already signaled that her relationship with the GOP may not be totally adversarial, contrary to some of her rhetoric during the midterm elections. She and the committee’s top Republican, Rep. Patrick McHenry of North Carolina, recently reintroduced legislation aimed at studying ways to further curtail insider trading. Waters has also said she may team up with McHenry on legislation aimed at improving crowdfunding and angel investing and may work with Republicans on items such as renewing the National Flood Insurance Program, amending the Terrorism Risk Insurance Act, and reauthorizing the mostly dormant Export-Import Bank.
There appears to be policy overlap between Financial Services Committee Democrats and the administration in at least one place: granting more federal leeway to banks who have, or want, marijuana businesses as customers. Banks in states that legalized marijuana for either medicinal or recreational use face a conflict with the federal government, which requires financial transactions with marijuana businesses to be labeled as suspicious.
Joseph Otting, the comptroller of the currency and acting director of the Federal Housing Finance Agency, says he hopes Congress will soon clarify the law around marijuana banking in states where the drug is legal.
“I would hope by 2020 we can get this issue resolved,” he told reporters at a roundtable breakfast.
Waters will need opportunities for advancing consensus and bipartisan bills, because there are business-friendly centrists among the panel’s Democrats. That could prove a challenge for the more outspoken freshmen. In addition to Ocasio-Cortez, newly elected progressives Reps. Rashida Tlaib, D-Mich., and Katie Porter, D-Calif., also sit on the committee.
“Most of us that are getting appointed have student loans. Most of us have the similar challenges with our mortgages, and our banking institutions, and our car insurance industry, for myself and so many others,” Tlaib told the Washington Examiner. “I think that that connection of experiencing the same challenges that many of our residents do with the industry that we regulate is going to be the change that you’ll see.”
Ocasio-Cortez has already displayed a penchant for bucking party leadership, as exemplified by her successful primary campaign against a 10-term incumbent. But when asked what her priorities were on the committee, she made sure to be deferential to more senior members, including Waters.
“There are so many members that have been really leading the efforts on that,” said Ocasio-Cortez. “Obviously Chairwoman Waters has been really digging into this for some time. And so, on those issues, I hope to just follow their lead and make sure that we all have accountability in this system.”
For their part, Republicans see an opportunity in the presence of Ocasio-Cortez, a democratic socialist, and some of the more progressive freshmen on the panel.
“We’ll have a great discussion about socialism in practice in the real world and what that means for working people, and trapping people in poverty, and bankrupting our country,” said Rep. Andy Barr, R-Ky. “The Democratic Party is clearly veering towards socialism, and the Republican Party, our side, will continue our robust defense of free enterprise, and I think that’s going to be a very stark contrast.”
