Neil Haggerty

Democratic proposals to offer free accounts, restrict overdraft fees and cap interest rates have zero chance of passage. But analysts say lawmakers’ push for products that help consumers is influencing some banks’ decisions to institute reforms on their own.

Democrats are pushing for a public-sector alternative to the three main credit bureaus, but Republicans argue that the government is ill-equipped to safely handle consumer data and produce accurate reports.

Sen. Pat Toomey of Pennsylvania, the Banking Committee's top Republican, is talking up the prospects of a bipartisan deal to overhaul Fannie Mae and Freddie Mac. But Democratic leaders sound less motivated to change the status quo for the government-sponsored enterprises.

During a House Financial Services Committee hearing, Democrats largely praised the policy decisions of acting regulators named by the Biden administration and knocked their predecessors. But Republicans warned that moves to reverse Trump-era policies would leave financial institutions without a clear road map.

The legislation, which the chamber passed Thursday, would ban collectors from making threatening statements to military service members and prevent credit bureaus from including debt arising from certain medical procedures.

Three Republicans joined Senate Democrats in voting to overturn a rule issued by the Office of the Comptroller of the Currency that makes it easier for national banks to sell loans to nonbanks. A companion resolution has been introduced in the House.

Three months into President Biden’s term, the White House has yet to select a nominee to run the Office of the Comptroller of the Currency or pick an acting chief. That inaction will make it more difficult for Democrats to unwind Trump-era policies, critics say.

The full Senate could deadlock on Rohit Chopra’s nomination as the Banking Committee did. If that happens, Vice President Kamala Harris is expected to cast the decisive vote in his favor.

Treasury Secretary Janet Yellen said she prefers to have the Financial Stability Oversight Council flag hazardous activities by nonbanks rather than subject specific firms to heightened supervision.

With a steady stream of Senate hearings held on the racial wealth gap and inequities in the financial system, the new chairman has set a consumer-focused agenda that leans further left than even past Democratic chairs.