WASHINGTON — Big banks opposed much of the Democratic agenda these past two years in Congress, and they could find a lot to like in a Republican-controlled House of Representatives.
Already, the GOP has a lengthy, bank-friendly to-do list.
The coming term should bring scores of oversight hearings into the implementation of new rules governing financial institutions. There will be scuffles over control of a new consumer financial protection agency. And lawmakers will debate how to restructure the quasi-governmental mortgage agencies Fannie Mae and Freddie Mac — which retain a major role in the current housing crisis.
All are issues that Bank of America, Wells Fargo and large other banking institutions will pay close attention to.
"We had been disappointed with a number of legislative outcomes with the past Congress, and so we look forward to better outcomes with this Congress," said Peter Garuccio, a spokesman for the American Bankers Association in Washington.
Garuccio said banks expect a corrections bill to peel back some of the financial regulations passed into law this year. Among them would be a repeal of the so-called Durbin Amendment, which cut debit-card fees for retailers. Banks say it cost them billions.
"That's a huge issue," Garuccio said.
Consumer groups worry that Republicans on the Financial Services Committee will rebel against almost every issue that Democrats tackled in the Dodd-Frank Wall Street Reform and Consumer Protection Act, as the financial overhaul was called.
"We want to make sure that the industry that caused this mess doesn't derail this comprehensive, common-sense approach to making sure this doesn't happen again," said Kathleen Day, a spokeswoman for the Center for Responsible Lending, based in Durham, N.C. "The banking industry is out there already saying this is really bad."
Most of the direct legislative action affecting banks concluded earlier this year with the Dodd-Frank Act, the broadest revamp of financial regulation since the Great Depression. Now, regulators are facing the challenge of implementing the complex legislation and working with increasingly complex and global financial markets.
Banks already have begun lobbying the administration.
"We are making our views known and especially responding to questions from federal regulators about the implications of the rules they are writing or how they could work," said Scott Silvestri, a Bank of America spokesman.
Meanwhile, House Republicans expect to hold hearings and conduct oversight into the law's implementation, said Rep. Patrick McHenry, R-N.C., a member of both the financial services and oversight committees.
"The (Securities and Exchange Commission) has new powers," McHenry said. "You also have the Consumer Financial Protection Bureau, and the rules that they create. That, in particular, will be of interest."
Republicans taking over the House Financial Services Committee are expected to try to reverse some parts of the landmark legislation, said Bruce Josten, the chief lobbyist for the powerful U.S. Chamber of Commerce. One area he expects action is the newly created Bureau of Consumer Finance Protection, which as constructed will have an independent budget not subject to appropriations from Congress.
"I think they will be highly motivated to force the (bureau) to annually come before Congress and request funding," said Josten, whose group vehemently opposed this central tenet of the Obama administration's revamp of financial regulation.
The bureau was designed to address many of the shortfalls in regulation that allowed lending standards to weaken in mortgage finance and create a housing bubble, which sunk the entire economy when it finally burst. The idea of the consumer finance agency came partly from Harvard University law professor Elizabeth Warren, who now heads the agency as a special adviser to the Treasury Department, since Republicans threatened to block her nomination.
Banks opposed the consumer panel, arguing that the regulation of consumer finance should stay with bank regulators, whose mission it is to guard the safety and soundness of lenders.
Consumer groups, though, disagree. "Getting this agency up and running is very important," Day said.
Many political observers expect gridlock to continue despite GOP gains. Republican legislation might pass the House, but it's unlikely to get through the Democratic Senate or past President Barack Obama's veto pen.
"What I see happening is, the House will demagogue a bunch of stuff, they'll pass a bunch of bills to the Senate, and it will die," said Rep. Mel Watt, D-N.C., a member of the Financial Services Committee.
However, both parties want to do something about the continuing foreclosure crisis and the backlog of homes caught in limbo. That includes restructuring mortgage giants Fannie Mae and Freddie Mac. When Congress passed the financial overhaul this year, it left out the housing sector as an issue yet to tackle.
"This is one where Republicans and Democrats can find some common ground," McHenry said.
The Dodd-Frank law requires Obama to offer a proposal by January on how to bring Fannie Mae and Freddie Mac out of governmental receivership. Obama Friday nominated North Carolina Banking Commissioner Joseph A. Smith Jr. to take over the two agencies. He still must be confirmed by the Senate.
While both parties want changes, lawmakers differ on whether to privatize the two agencies entirely, or whether to retain some governmental backing. The quasi-governmental agencies now exist to purchase the mortgages of lenders such as Bank of America, freeing up cash to make yet more loans.
(Kevin G. Hall contributed to this article.)
MORE FROM MCCLATCHY
As good jobs go away, middle class downsizes
With Social Security proposal, deficit panel touches third rail
Temporary extension of Bush-era tax cuts gaining momentum
Senate Republicans split over coming earmark vote
Homeowners hit with foreclosure during loan modification efforts
How 2 civilian sleuths brought foreclosure problems to light
Follow the latest politics news at McClatchy's Planet Washington