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Committee Outlook
117th Congress Outlook
House Committee on Ways and Means
Democrats Retain Control
The House Committee on Ways and Means has been very active in the municipals space during the 116th Congress. Led by former Springfield, MA Mayor Richard Neal (D-MA), most recently the Chairman introduced a robust infrastructure practice that would amongst other provisions:
  • Restore tax-exempt advance refundings;
  • Expand the usage of PABs; Raise BQ debt limit; and
  • Create a new direct pay bond exempt from sequestration.
As long-standing priorities for the BDA and the broader Public Finance Network, the bill was met with praise, but following passage in the House coupled with a broader Surface Transportation Reauthorization package, the provisions were stonewalled in the Senate. This package will be a starting point for the expected infrastructure debate in early 2021. Under the Chairman, who recently won a hard-fought primary challenge and rolled to victory in November, the Committee has a full bench of muni champions, all of which are predicted to win reelection. This includes:
  • Terri Sewell (D-AL)
  • Gwen Moore (D-WI)
  • Dan Kildee (D-MI)
  • Tom Reed (R-NY)
House Financial Services Committee
Democrats Retain Control
House Financial Services, led by Chairwoman Maxine Waters, while not spending much time focused on fixed income or the capital markets in the 116th Congress, has focused on issues of importance to the BDA such as GSE reform.
The stated goals of the Committee have been to protect consumers, investors, and vulnerable families.
The Chair has worked to achieve these goals by:
  • continued examination of minority depository institutions;
  • reviewing stock buybacks;
  • and analyzing innovations in loan instruments.
Many believe that the Biden Administration would review these priorities, with an emphasis on stock buybacks, and capital planning for banks.
The Biden platform also places emphasis on the Community Reinvestment Act, a program in which the Chairwoman has been supportive of, in particular:
  • Expanding the CRA to mortgage and insurance companies, marketplace lenders, and FinTech; and
  • Requiring financial institutions to produce explicit statements setting out their public interest commitments.
It's worth noting that these initiatives would have to be achieved at the regulatory level due to the divided Congress.

The Committee continues to focus on the Trump Administrations' efforts to reform GSE’s and will likely continue fighting against reforms regardless of the Presidential elections. The Chairwoman, a longtime opponent of reform, will almost certainly retain the position for the next Congress. It’s also worth noting that the current financial distress our country is navigating may further delay administrative reform. While the mortgage market has yet to hit severe turbulence, the long-term prospectus on the industry varies.

At a mid-November hearing with top Trump financial services appointees, Waters claimed, she and the Committee will fight to reverse the easing of financial rules that have taken place under President Donald Trump, calling the election of Joe Biden "the dawn of a new progressive America."
At this time, it appears likely that working to roll back many provisions enacted by the Trump administration such as “capital building” at Fannie and Freddie will be on the Committee's agenda in the 117th Congress.
It should be noted, if Republicans control the Senate, legislative changes are probably off the table. However, the Administration could pursue administrative action much as the Trump administration has proceeded.
Senate Banking Committee
Republican Retain Control
The Senate Banking Committee is likely to be Chaired by Senator Pat Toomey (R-PA) in place of Mike Crapo (R-ID) who is expected to take over the Finance Committee. While there may be a change in leadership, under Toomey, Banking Committee priorities will likely remain the same.
Senator Toomey in recent interviews has stated the desire to prioritize ending the conservatorship status of Fannie Mae and Freddie Mac, a continuation of Former Chairman Crapo’s agenda and a cornerstone of BDA’s taxable agenda.
Chairman Toomey plans to prioritize other regulatory and legislative fixes for issues such as technology, fintech, payment systems, and a digital currency.
Toomey has recently made waves with his stance on ending the Feds Municipal Liquidity Facility immediately. As a Member of the CARES Act Oversight Committee, Toomey continues to press Treasury and Fed leadership to sunset the program, a position that seems likely to succeed.
Democrats Flip Control Senate
If the Senate flips to Democratic control, the Senate Banking Committee will likely take a hard turn left as Ranking Member Sharrod Brown (D-OH) would be in line to take over the gavel. A champion for the workingman, Brown is skeptical of capital markets and banking in general, a concern for the industry.
Recently Senator Brown introduced legislation that would ensure the very largest money center banks have enough capital to cover their losses, so taxpayers don’t have to, and would ensure a level playing field for other financial institutions.
However, Brown has gone on record in support of the tax-exemption, and as recently as this summer pressed the administration to expand access to the Municipal Liquidity Facility in order for more issuers to be able to access the debt. Ranking Member Brown also questioned Administration officials about their support of the tax exemption during the debates surrounding the 2017 Tax Cuts and Jobs Act.
Senate Finance Committee
Republican Retain Control
Banking Committee and a well-known legislator who is not afraid to cross the aisle to get things done. In his prior role as Chairman of the Banking Committee, Crapo continued to focus on priorities such as housing reform, capital markets, FinTech, and overall economic growth. Most recently, Senator Crapo joined many Banking committee Democrats to pass S. 2155 the Economic Growth, Regulatory Relief, and Consumer Protection Act, a sweeping measure aimed at reforming provisions of the Dodd-Frank package.
Mr. Crapo has also been a strong proponent of raising the bank qualified debt limit in years past. Following the passage of the 2009 Recovery Act, Crapo sponsored The Municipal Bond Market Support Act of 2010 that would raise the limit from $10 million to $30 million permanently and also index the number to inflation.
More recently, Crapo supported the creation of the Feds Municipal Liquidity Facility and went as far as introducing an amendment that would expand the Feds authority granted in the CARES Act to allow the Municipal Liquidity Facility to underwrite credits that may incur losses, without expanding the list of eligible entities.
Crapo continues to be a proponent for more stimulus, however, his stance on additional aid for state and local governments has been less clear.
Democrats Flip Control of Senate
If Democrats flip the Senate, Ranking Member Ron Wyden (D-OR) would certainly take the reins of the Committee. Known as a staunch progressive, Wyden attempts to buck that title and find middle ground often. This “principled bipartisanship,” works to fund solutions that allow all parties to stay true to their respective principles while taking the best ideas from all sides.
As a champion of infrastructure investment, Wyden is a long-time proponent of Build America Bonds and the tax exemption. Bills such as the Wicker-Bennet American Infrastructure Bonds Act that would provide a 35% federal subsidy to taxable bonds from the date of enactment through 2026, when the subsidy would drop to an estimated revenue-neutral rate of 28% would likely see movement in a Wyden led Committee, as would any efforts to reinstate municipal advance refundings.