Meme stocks, crypto and student loans: what to watch for at SEC, CFPB confirmation hearings

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President Biden will have the opportunity to force profound changes on the American corporate sector on Tuesday morning, when his picks to lead the...

President Joe Biden has the opportunity to force profound changes on the American corporate sector, and efforts in this direction will take a big step forward on Tuesday morning, when his picks to lead the Securities and Exchange Commission and the Consumer Financial Protection Bureau will participate in confirmation hearings before the Senate Banking, Housing and Urban Affairs Committee.

The House Financial Services committee has already grilled the major actors in the drama, including executives from online broker Robinhood and Reddit, where investors have congregated to promote these stocks, but senators have yet to wade into the issue in a public forum.Expect Gensler to field questions on the topic of payment for order flow, or the practice by which market makers pay retail brokers to route customer orders their way, in a system critics say creates a conflict of interest.

“Gensler taught a course on blockchain at MIT, so he probably brings more knowledge of the technology that backs crytocurrencies than ay other public official,” according to Brian Gardner, chief Washington policy strategist at Stifel. “We think he will be generally supportive of the sector, but will still look for ways to increase regulation of the asset, including the consideration of additional anti-money laundering rules.

The CFPB has been gearing up to take a much more aggressive approach to overseeing mortgage lenders, student loan servicers and other financial institutions, even before Chopra’s confirmation. Last month, Acting Director David Uejio published a blog announcing the “new priorities and focus” of the agency, which include actions to help consumers who are suffering from the economic impact of COVID-19.

 

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