Washington in 2022
As we prepare for year two of the Biden Administration and another year of the seemingly unending pandemic, we take a brief look at what we can expect in DC in 2022.
On the administration front, President Biden’s bold 2021 policy agenda that included prioritizing pandemic recovery, climate, and focusing on racial equity is anticipated to continue in 2022.
Congress wrapped up 2021 by addressing a couple of must-pass items (the debt ceiling and National Defense Authorization Act (NDAA)), while leaving two big ticket items (government funding and the Build Back Better Act (BBBA)) at the top of the agenda for 2022 – which also happens to be a midterm election year. Prospects of BBBA passage however seem even dimmer now than they did before the holidays.
Midterm election years generally see a shift in focus to campaign-mode, particularly for the party in charge. Democratic leadership and Committee Chairs will attempt to hold on to their margin, avoid controversial agendas, and even provide an opportunity for more bipartisan measures. Similarly, President Biden and Democratic Senators will seek to rapidly fill remaining vacancies especially as they look to the potential of losing control of the Senate. Meanwhile, Republicans will spend the year attempting to focus on what Democrats have done wrong. One positive for both parties is they will not have to deal with the debt ceiling again prior to the midterms.
2022 Industry Specific Activity
Senate Banking & House Financial Services Committees
The House Financial Services Committee (HFSC) and Senate Banking Committee (SBC) are expected to have robust hearing agendas in 2022, with both holding more than 60 hearings in 2021. There will be less action in the SBC this month however nominations hearings for Fed Chair Powell and Governor Brainard for Federal Reserve positions are scheduled. HFSC will have a lighter agenda this month as well, with only a few hearings and no markup, although the schedule is still in the works. So far we have not heard of any debt collection or consumer credit related hearings on the schedule.
Senate & House Judiciary Committees
In 2022 the House and Senate Judiciary Committees will continue to grapple with nominations, DOJ and other agency oversight, voting rights, and other related items. Neither committee has released full hearing agendas yet. We continue to monitor these committees for issues related to our practice area and industry.
A year into his administration, Biden's top financial regulatory team is finally taking shape. Over the next 12 months, his picks are set to reverse the former Trump administration's lighter touch, taking a tough stance on Wall Street and new players entering the financial sector. Top items on the Biden administration's and CFPB’ s ambitious regulatory agenda include creating a regulatory framework for digital assets and financial technology players, boosting competition and addressing climate change. The CFPB's regulatory agenda priorities include financial records data, small business lending and Regulation Z.
Next year will be critical for financial firms hoping to shape the outcome of regulations on these issues. Analysts and Washington insiders indicate that 2022 is the year where the rhetoric turns into reality for some of the key financial services policy priorities.
Industry continues to closely monitor Hunstein v. Preferred Collection and Management Services, Inc., No. 8:19-cv-00983-TPB-TGW. Most recently, on Nov. 17, 2021, the Eleventh Circuit issued an opinion that the entire court will rehear this matter en banc. Briefing before the entire court started Dec. 23, 2021 and concludes on Feb. 22, 2022. The Court has indicated its desire to focus on the standing issue. Industry anxiously awaits the final ruling in 2022.
Other Expected Congressional Activity
Build Back Better Act: The White House will have to lead the effort to unify the party quickly for any chance of success. As more time goes on without a compromise, the chances of Democrats salvaging BBBA may weaken.
Government Funding: When Congress left for the Holidays, FY22’s comprehensive government funding bill was not passed. The current Continuing Resolution (CR) expires on February 18th and makes funding one of the first things that must be addressed. Given the lack of progress so far, and the Republicans’ desire to keep funding at the current Trump Administration levels, it’s likely that another short-term CR will be needed.
COVID-19: COVID-19 and the ensuing economic implications remain a top-of-mind item for members across the dais, particularly given the recent wave of cases across the country. Some progressive Democratic members advocate another COVID-19 relief package, however strong Republican opposition and lack of momentum or urgency make such a package unlikely.
Environmental, Social, and Governance (ESG): ESG-related issues have remained at the forefront of discussions in Washington this year. While continued congressional efforts to promote climate and diversity initiatives in the private sector is anticipated, concrete action will more likely come from the regulators in 2022.
Financial Technology: Congress and regulatory agencies will continue to weigh both the benefits and potential risks of technological innovations in the financial space. This includes the incorporation of artificial intelligence and machine learning into underwriting practices, lending decisions and credit scoring. Regulatory focus will be on deterring algorithmic bias, ensuring companies comply with fair lending laws, Buy Now, Pay Later and Earned Wage Access products.