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WASHINGTON: U.S. President Joe Biden’s nominees to head two key financial watchdogs will be questioned by lawmakers on Tuesday on how they plan to tackle racial and income inequality, climate change, fintech regulation, cryptocurrencies, corporate enforcement and other issues.
Gary Gensler, the White House’s nominee to lead the Securities and Exchange Commission (SEC), and Rohit Chopra, nominated to be director of the Consumer Financial Protection Bureau (CFPB), will appear before the Democratic-led Senate Banking Committee.
Progressives see the agencies as key to advancing policy priorities on climate change and social justice and expect the pair, both experienced corporate regulators, to take a tough line on Wall Street. Republicans have criticized Biden for bowing to leftists and have warned that Gensler and Chopra will be divisive if confirmed to the positions.
“These are both going to be key officials setting financial policy for Team Biden. For Gensler, the focus will be on investor protection and how the SEC should respond to GameStop-related market volatility. For Chopra, it will be about his vision for the agency and his enforcement priorities,” said Jaret Seiberg, an analyst at Cowen Washington Research Group.
In prepared remarks posted on Monday, the two nominees vowed to be diligent stewards of the watchdogs without delving into specifics.
As head of the Commodity Futures Trading Commission, Gensler implemented new swaps trading rules created by Congress in 2010 in response to the global financial crisis, developing a reputation as a tough operator willing to stand up to powerful Wall Street interests.
He will join the agency in the wake of January’s social media-fueled trading frenzy in shares of video-game retail firm GameStop Corp and is likely to be grilled on how he will tackle issues raised by the saga. That includes the practice of betting that stocks will fall, or shorting, potential market manipulation on social media, and how retail brokers handle customer orders, analysts said.
Democrats will also likely push Gensler to commit to new corporate disclosures on climate change risks and political spending, and to complete executive compensation curbs. Whether the SEC will take a tougher line on cryptocurrency offerings and investments is also expected to be a focus for lawmakers, analysts said.
