President Joe Biden’s nominees to lead two key regulators will face Senate confirmation hearings early next month.
Gary Gensler, Biden’s pick for chairman of the Securities and Exchange Commission (SEC), and Rohit Chopra, nominated as director of the Consumer Financial Protection Bureau (CFPB), are scheduled to appear before the Senate Committee on Banking, Housing, and Urban Affairs on March 2.
Gensler previously led the Commodity Futures Trading Commission (CFTC) for five years. Chopra is a current member of the Federal Trade Commission and previously served as assistant director at the CFPB for five years under former Director Richard Cordray.
Questions for Gensler
If his nomination is confirmed, Gensler would become the fifth commissioner of the SEC, a body whose membership is currently comprised of two Democratic members and two Republicans. Many of the most controversial votes under the term of former Chair Jay Clayton were decided by 3-2 margins.
Clayton was an insider with former President Donald Trump and seen by many as promoting Trump’s agenda to lighten government regulation. Under Gensler, the pendulum will likely swing back the other way.
Senators will want to know how an SEC under Gensler’s command will operate. Does he intend to regulate large banks, investment firms, and other powerful organizations more aggressively? How will that translate into guidance, rulemaking, and enforcement actions?
Gensler will likely face questions about how the SEC should respond to the recent market volatility involving short sellers and retail investors that caused wild swings in value for previously moribund stocks like GameStop, AMC Entertainment, BlackBerry, and several others.
Gensler might also be pushed to explain his stance on how public companies should disclose risks related to climate change and how regulated entities of all types should discuss environmental, social, and governance (ESG) investments. Biden has made it clear he will make addressing climate change a priority of his administration.
Biden has also prioritized diversity initiatives. Gensler promoted a rule on diversity in corporate governance while at the CFTC, although the rule was never approved. Senators may ask Gensler how he intends to interpret Biden’s mandate on diversity with rulemaking.
Questions for Chopra
Fair lending practices are likely to receive increased scrutiny under a Chopra-led CFPB, and senators might want to know how that scrutiny will be applied. Chopra is likely to restore the Office of Fair Lending to a free-standing unit within the CFPB, as it was during his previous time with the agency.
Progressives in the Democratic party are pushing Biden to forgive millions of dollars in student loan debt; Chopra was the CFPB’s student loan ombudsman during his previous tenure and is likely to have strong opinions on the subject.