Financial Services Regulatory Reform Update - January 7, 2011


This past week saw the beginning of the 112th Congress and the official transfer of power from Rep. Nancy Pelosi (D-CA) to Rep. John Boehner (R-OH). However, beyond the pomp and circumstance of new members being sworn in, there was little substantive work accomplished this week, with most of the real news in Washington devoted to the “palace intrigue” taking place at the White House. With President Obama announcing some personnel adjustments that seem transparently aimed at winning the hearts of the business community. To replace Chief of Staff Rahm Emanuel, who will be running for mayor of the city of Chicago, Obama chose William Daley, “a centrist with business ties.” Daley’s most recent post was as Midwest Chairman of JPMorgan Chase, but he also has significant experience running presidential campaigns and was President Clinton’s commerce secretary. Further staffing changes are discussed below.

Committee assignments are still being determined, and we expect both parties to flesh out party ratios and leadership over the next couple weeks. Late on Friday, we learned that California Democrat Jackie Speier would leave the Committee, which should ensure that Gary Peters (D-MI) and Jim Himes (D-CT) will remain on the committee. Additionally, we anticipate that one other Democratic, likely Allyson Schwartz (D-PA) or Debbie Wasserman-Schultz (D-FL) will be added to the committee. Additionally, at least one other Republican will be named, although it is unclear who this is at the moment. However these ratios and placements ultimately play out the leadership of the committee is set with Rep. Spencer Bachus (RAL) taking over as Chairman and Rep. Barney Frank (D-MA) will be Ranking Member. On the Senate side, there is less change because the Democrats remain in power, but committee ratios will be altered there as well. On the Senate Committee on Banking, Housing and Urban Affairs, the chairman from the 111th Congress retired, and the new head will be Sen. Tim Johnson (D-ND). The Ranking Member will continue to be Sen. Richard Shelby (R-AL). However, due to the decreased Democratic majority in the Senate there will be a need to adjust the ratios of the committee, which are currently at 13-10. It is not yet clear whether the final ratio will be set at 12-10 or 13-11, but we anticipate that the final ratio will be 12-10. If so, that would necessitate the inclusion of one additional Democratic member and three republican members to replace those on the committee who either lost or retired during the last election cycle. We hear that Senator Kay Hagan (D-NC) is the likely to fill the Democratic slot and that Ron Johnson (WI), Mike Lee (UT) and Rand Paul (KY) will fill the Republican slots.

Please see full update below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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