Joe Biden has tapped Gary Gensler, the former Goldman Sachs investment banker and financial regulator during the Obama administration, to be the next chair of the Securities and Exchange Commission.
Mr Gensler’s selection was paired with the nomination of Rohit Chopra, a commissioner at the Federal Trade Commission, to be the next director of the Consumer Financial Protection Bureau, and both herald tougher policing of the financial services industry by Washington.
Mr Gensler is a well-known quantity on Wall Street after heading the Commodity Futures Trading Commission during Barack Obama’s presidency at the height of the financial crisis. He had been a key contender to lead an economic or financial agency after heading Mr Biden’s transition team on the Federal Reserve, banking and securities regulation.
Although Mr Gensler championed the deregulation of the financial services industry decades ago, he is now considered a proponent of more constraints on the sector. His appointment was cheered by Richard Trumka, the president of the AFL-CIO labour federation, in a sign that he was considered palatable on the left of the Democratic party.
“We applaud Joe Biden for choosing a man who stands up for public interest against Wall Street excess, is knowledgeable and has shown through his work during the Obama administration that he supports working families,” Mr Trumka wrote in a tweet on Monday morning.
Both appointments were praised by Elizabeth Warren, the liberal Democratic senator from Massachusetts who was one of the architects of the CFPB when it was created in the aftermath of the financial crisis to curb predatory practices by financial institutions.
“For too long, our banking regulators have behaved like they work for the financial institutions they regulate — not the American people. But big change is coming,” she wrote on Twitter, saying Mr Biden could not have made “better picks” for the jobs.
During his time at the FTC, Mr Chopra has helped to lead the charge against Big Tech, voting in favour of the agency’s move to sue Facebook for “illegal monopolisation” along with a large group of state attorneys-general. Mr Chopra has also taken an interest in financial sector issues, including protecting tenants from any fallout from the end of coronavirus eviction moratoriums, and reining in debt collectors.
During the Trump administration, financial regulators used a lighter touch in policing Wall Street, diminishing the power of agencies like the CFPB and rolling back some of the provisions of the Dodd-Frank Wall Street reform enacted by Mr Obama.
The incoming Biden administration is expected to take a tougher stance amid soaring asset prices in the financial sector that have caused some concern about the emergence of unhealthy bubbles, even as the rest of the US economy is still struggling to rebound fully from the pandemic.