Under the Biden administration, it is unlikely that major financial services legislation like a Dodd-Frank Act will pass in the next few years, especially if Republicans hold the Senate. The Biden Administration will nevertheless have significant opportunities to shape policy through the federal financial agencies. The adage that “personnel is policy” rings especially true for these agencies.

President-elect Biden’s appointments to key posts will depend on intra-party and inter-party dynamics. Financial regulation is historically an area of disagreement between the centrist and progressive wings of the Democratic Party. President Biden’s approach to navigating those differences—and the outcome of the Senate race—will likely be key drivers of his decisions.

How quickly President-elect Biden will be able to make appointments to the federal financial agencies is its own question, and the answer depends on the agency.

  • On one end of the spectrum is the Consumer Financial Protection Bureau, or CFPB, which the Dodd-Frank Act created to enforce consumer financial laws. Thanks to a Supreme Court ruling this year, the President can remove the existing CFPB director essentially immediately upon being sworn in.
  • On the other end of the spectrum is the Federal Reserve. Chairman Powell’s term as Chair ends in February 2022. The rest of the Board of Governors consists of members with staggered terms who cannot be removed at will, and most of the current members are President Trump appointees.
  • Most of the other financial regulators are somewhere between those two extremes as far as a President Biden’s ability to effect change quickly through changes in personnel.

The potential policy agenda for Biden-led agencies is not entirely certain, because financial regulation was not a central part of his campaign platform, but some outcomes seem likely:

  • Wall Street firms are likely to be a bigger target for regulation and enforcement than under the Trump administration, and smaller firms may also see some uptick in regulation and enforcement.
  • Regulators are likely to enforce consumer protection laws more aggressively. A new head of the CFPB could pursue large fines from companies and adopt new regulations prohibiting abusive and unfair conduct.
  • New leadership could seek to undo some of the regulatory reforms of the last four years, and to finish the unfinished business of the Obama years, including open rulemakings.

Appointees to the financial regulators could also affect non-financial businesses, because those regulators can influence financial institutions’ decisions of which customers to serve. For instance, regulators could focus on the risks of banking customers that are responsible for greenhouse gas emissions, and the SEC could require more disclosure from public companies relating to Environmental, Social, and Corporate Governance (ESG) matters.