Election Signals Anti-Regulation Sentiment

The GOP victory in yesterday’s mid-term elections probably will not translate into any immediate relief for the consumer financial services industry. But if you are looking for any sign of where things might be heading, know that voters handily rejected many candidates Sen. Elizabeth Warren, the unofficial founder of the Consumer Financial Protection Bureau, stumped for this election cycle.

US Capitol Dome Houses of Congress Washington DCMartha Coakley, the Massachusetts Attorney General, spent the last few years promulgating some of the most restrictive debt collection regulations in the nation. Warren was a frequent campaign companion, but it didn’t help Coakley in the end, she lost her bid for Massachusetts Governor to Republican Charlie Baker.

In Colorado, Warren stumped for Mark Udall. “Mark Udall is the kind of guy the women of Colorado can count on,” Warren said before a recent visit. Colorado women apparently did not share the same sentiment and will send Cory Gardner to Washington instead.

In Iowa, Bruce Braley was the Democrats’ selection to replace retiring long-time Sen. Tom Harkin. So Warren made a mid-October appearance. The result was a disaster for a seat the Democrats saw as critical to their hopes to save their Senate majority. Joni Ernst took the Senate seat with more than 52 percent of the vote.

After Warren lost her effort in the Senate student loan legislation, she made a point to tell MSNBC’s Chris Hayes that, “One way I’m going to start fighting back is I’m going to go down to Kentucky and I’m going to campaign for Alison Lundergan Grimes.” That didn’t work out so well either. Grimes, who was another focus of the Democrats’ efforts to save their majority, lost her bid to unseat Senate Minority Leader Mitch McConnell by more than 15 percent. The race was one of the first to be called by the media.

Warren also was a topic in Arkansas. In his bid to unseat Democratic Sen. Mark Pryor, Republican Congressman Tom Cotton made a point to link Warren, who was his professor when he attended Harvard, as the “intellectual founder of the radical Occupy Movement” and someone who supports a “European-style, single-payer” health care system. It worked. Pryor is on his way to Washington.

Warren stands for government regulation of the choices people can make to obtain financial products and services, often through limiting those choices. Sen. Warren did serve as a lightning rod to encourage voters to head for the polls – to oppose the very concept of government regulation she represents.

Unwittingly, Warren opened the doors for reformers, like Rep. Jeb Hensarling, chairman of the House Financial Services Committee, who as the Wall Street Journal reported on Oct. 18, has been stymied by soon-to-be former Senate Majority Leader Harry Reid’s refusal to bring any meaningful legislation to the Senate floor. In the next Congress, Hensarling will likely have the ear of Alabama’s Richard Shelby, who the Wall Street Journal expects to become chairman of the Banking Committee in a GOP Senate. We may be in store for some changes to begin in 2015.

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Donald Maurice provides counsel to the financial services industry, successfully litigating matters in the state and federal courts in individual and class actions. He has successfully argued before the Third, Fourth and Eighth Circuit U.S. Courts of Appeals, and has represented the financial services industry before several courts including as counsel for amicus curiae before the United States Supreme Court. He counsels clients in regulatory actions before the CFPB, and other federal and state regulators and in the development and testing of debt collection compliance systems. Don is peer-rated AV by Martindale-Hubbell, the worldwide guide to lawyers. In addition to being a frequent speaker and author on consumer financial services law, he serves as outside counsel to RMA International, on the governing Board of Regents of the American College of Consumer Financial Services Lawyers and on the Governing Committee of the Conference on Consumer Finance Law. From 2014 to 2017, he chaired the ABA's Bankruptcy and Debt Collection Subcommittee.