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Shelby named Chairman of powerful Banking Committee, here’s why that matters

Sen. Richard Shelby (R-Ala.)
Sen. Richard Shelby (R-Ala.)

WASHINGTON — U.S. Sen. Richard Shelby (R-Ala.) on Thursday was named the Chairman of the Senate Banking Committee, a panel with jurisdiction over a wide range of issues, including the country’s financial institutions, public and private housing, urban development and mass transit, and federal money policy, most notably the Federal Reserve System.

“It is an honor to lead the Senate Banking Committee in the 114th Congress,” Sen. Shelby said upon being elected by the committee’s members. “I look forward to working with my colleagues in the House and Senate to implement policies that will foster economic growth.”

Shelby is known in Washington for being a financial regulatory reform champion, a reputation he earned in his previous stint as Chairman of the Banking Committee roughly a decade ago.

The country is now several years into the implementation of Dodd-Frank, the sweeping — many conservatives would say onerous — regulatory reform package passed by Democrats in response to the so-called “Great Recession.” Shelby taking over the Banking Committee’s top post likely means he’ll be digging into Dodd-Frank and calling out some of the more egregious regulations that have been imposed on the U.S. financial sector.

Shelby will also likely place himself at the center of housing finance reform, an issue that doesn’t grab headlines but is incredibly important for the U.S. economy. Close to 100 percent of the U.S. mortgage market is currently backed by the federal government. A bipartisan group on the Senate Banking Committee has been trying to reform the government’s role in the market, but many conservatives don’t believe their efforts go nearly far enough and leave the government no less involved than they were prior to the 2008 crash. With Shelby guiding the process, he will have the opportunity to build consensus around a more conservative proposal, and close the gap between the Senate and the House, where Financial Services Committee Chairman Jeb Hensarling, R-TX, has been pushing major reforms.

Having an expert negotiator and dealmaker like Shelby in charge of the powerful Banking committee significantly adds to Alabama’s clout in the 114th Congress.