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|16 January, 2019

Wall Street hunkers down for a D.C. pummeling

Longtime Wall Street critic Maxine Waters of California is now running the House Financial Services Committee

Image used for illustrative purpose. Speaker Nancy Pelosi (D-CA) addresses the U.S. House of Representatives during the start of the 116th Congress on Capitol Hill in Washington, U.S., January 3, 2019.

Image used for illustrative purpose. Speaker Nancy Pelosi (D-CA) addresses the U.S. House of Representatives during the start of the 116th Congress on Capitol Hill in Washington, U.S., January 3, 2019.

Reuters/Jonathan Ernst

WASHINGTON - Wall Street will have to hunker down for a Washington pummeling. Big banks enjoyed a bit of a reprieve while deregulation-bent Republicans controlled both Congress and the White House. Democrats now in charge of the U.S. House of Representatives are stressing industry accountability, though. And left-wing additions to the financial-services panel will increase the pressure on the sector.

Longtime Wall Street critic Maxine Waters of California is now running the House Financial Services Committee. She has already called for Wells Fargo to be broken up or shut down; asked Deutsche Bank for information about loans to Donald Trump’s businesses before he became president; and described JPMorgan and Citigroup as recidivist banks.

In her new role, Waters can subpoena witnesses and evidence and indicated on Wednesday that she intends to do so. Holding large banks accountable will be one of her top priorities, including ensuring regulators are doing their jobs, she told the audience at an event hosted by the progressive Center for American Progress think tank.

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Newly elected Representative Alexandria Ocasio-Cortez, who describes herself as a democratic socialist, echoed Waters’ views. She is one of a handful of new additions to the financial-services committee who come from the left wing of the party. On Twitter, Ocasio-Cortez wrote that exploring the development of public banking is one of her priorities. She may be joined on the committee by Congresswoman Katie Porter of California, a protégée of Senator Elizabeth Warren, who is running for president in 2020.

Waters also is forming a new subcommittee on diversity and inclusion to examine the hiring of women and minorities, including as managers and executives. She said she recently visited some technology companies in Silicon Valley and was shocked at how few blacks and Latinos work there.

Ocasio-Cortez has attracted national media attention and her positions are raising questions about how much to the left the Democratic party could move. The spotlight that she, Waters and others shed on Wall Street is unlikely to pose a threat to the industry this year alone, though. Chances are it’s going to be a political punchbag all the way into the 2020 presidential election.

CONTEXT NEWS

- Congresswoman Maxine Waters of California, the new chair of the U.S. House Financial Services Committee, said on Jan. 16 that the growth of financial technology, credit-reporting reform, diversity in the banking industry and holding Wall Street firms accountable are among her priorities.

- Waters, who took over leadership of the committee after the Democratic victory in the November elections, was speaking at a Center for American Progress event.

- Newly elected Representative Alexandria Ocasio-Cortez of New York, who describes herself as a democratic socialist, is one of the new members of the House Financial Services Committee. She wrote on Twitter that she wanted to examine the student-loan “crisis” and the development of “public & postal banking.”

(Editing by Antony Currie and Martin Langfield)

© Reuters News 2019

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