Last week’s mid-term elections delivered the Republican Party a majority of both houses of Congress for the first time since 2006, including a new majority in the United States Senate and a further solidified majority in the United States House of Representatives. With the GOP taking control of the 114th Congress in 2015, many are speculating as to what, if any, changes might be seen in the arena of financial regulation.
Many publications, including American Banker, agree that, despite the aggressive public stance taken recently by some Republican leaders in opposition to the Affordable Care Act, Dodd-Frank and the Consumer Financial Protection Bureau, legislative action will likely be restrained on these topics. While Republicans will have control of the Senate and House, they will not have the 60 Senate votes necessary to stop a Democratic filibuster, or the two-thirds vote required in both houses to override a Presidential veto. This means some measure of bi-partisan compromise will still be necessary to enact important pieces of legislation.
One area cited by a number of articles as being ripe for possible action is corporate tax reform. The Wall Street Journal and New York Times both highlight the possibility of reforms to lower corporate tax rates while also closing loopholes, in order to remain roughly revenue neutral. Tax legislation that would permit repatriation of overseas profits is also mentioned as a possibility.
Pensions and Investments writes about potential changes to tax incentives for retirement plan sponsors and participants, and also mentions the possibility of a GOP-led “fix bill” to Dodd-Frank, which could include, among other things, replacing the Financial Stability Oversight Council’s single director with a five-member commission. Also, the Wall Street Journal notes possibility of Dodd-Frank changes that would provide regulatory relief for smaller banks, which could include raising the threshold for a bank to be considered a “systemically important
financial institution” from its current level of $50 billion.