Head of Government Affairs Elizabeth Taylor and her D.C. team are the eyes and ears – and voices – for Regions in Washington.
The team directs the bank’s legislative, political and regulatory policy activities and leads efforts to communicate with elected and appointed officials at the federal and state levels. They also provide advocacy with various federal and state legislative bodies and executive and regulatory agencies.
Government Affairs’ work is especially important right now, in the current divisive political climate in which some major social, economic and regulatory issues are on the forefront. And many of those matters have a direct impact on the bank, our associates and our customers.
Taylor and Daniel Grattan, Federal Government Affairs manager for Regions, provide some guidance and context for four big topics that are on everyone’s minds right now – at least those of us in the financial services industry.
The Federal Reserve is in the midst of an effort to execute a “soft landing” for the economy in attempting to get a hold on the highest inflation in four decades by increasing their benchmark interest rate at a pace that is fast enough to keep inflationary pressures at bay without causing a significant recession or a period of stagflation.
Taylor and Grattan are monitoring how that will impact potential legislation or executive decisions. “Washington despises economic pain,” Grattan said. “And the Biden administration has proven they are willing to take rather progressive steps to provide fiscal backstops, such as student loan forgiveness. If a significant economic slowdown occurs in 2023, we may see more targeted relief. This could include funding for housing programs, debt payment holidays, loan principal forgiveness, or other measures.”
“The various regulatory agencies have very busy agendas right now, with a heightened focus on consumer protection and fairness,” said Taylor. “Now that the Federal Reserve finally has a full Board, and with two new FDIC Board Member nominations pending in the Senate, we anticipate increased activity by those agencies. The CFPB is charged by Congress to protect the consumers of financial products. They are focusing on a number of specific consumer issues including online fraud with a particular emphasis on person-to-person fraud through payments apps. We’re keeping a close eye on these activities, especially in areas where increased regulation impacts our business.”
The ongoing Ukraine-Russia conflict is resulting in heightened geopolitical concerns, but that’s not the only area of instability. “Military aggression, rising cost of goods, questions around energy supply and social protests are creating sort of a powder keg globally,” Grattan said. “It seems as though we are close to a tipping point, one way or another. I hope we tip toward cooler heads prevailing everywhere.”
The Midterm Elections:
Despite concerns around the current economic conditions, Democrats gained some momentum over the summer, heading into the midterms, according to Taylor. Some issues that she and the team are watching include the impact of the Supreme Court’s ruling on abortion and energy prices. The Court decision may be a motivating factor for Democrats in some Senate races in key states.
Also, recent passage of some significant legislation could make an impact, such as the Inflation Reduction Act, which includes investments to make health care and prescription drugs more affordable, tax incentives to promote green energy, and tax increases for some large corporations. The CHIPS Plus bill encourages construction of microprocessor manufacturing facilities in the U.S., and the PACT Act that expands VA health care and benefits for Veterans exposed to burn pits and other toxic substances. “Democrats view these new laws as victories and intend to tout them as evidence of their accomplishments in some contested races,” Taylor said.
She added, “The executive order addressing student loan forgiveness has been a divisive issue and has already been scaled back due to concerns about court challenges. Even with these changes, it’s unclear if it will ultimately hold up to court challenges. Some moderate Democrats also are concerned about the politics of forgiving student loans when the majority of their constituents don’t have them.”
So, what are Taylor and Grattan’s predictions? “Midterms are traditionally a referendum on the party in the White House, and while this year has more texture to it given the issues we talked about, there is no reason to believe that Republicans won’t gain a majority in at least one chamber of Congress,” Grattan said. “I expect a modest GOP House majority, perhaps 15 seats. On the other side of the Capitol, it is absolutely possible to once again have 50-50 Senate, with a slight lean bias towards Republicans gaining a seat to have a 51-49 majority.”
“I agree,” said Taylor. “The majority in the Senate is really going to be decided by a handful of states. North Carolina, Ohio and Pennsylvania have open seats due to Republican retirements and are hotly contested races. Democrat incumbents are facing significant challenges in Georgia, Nevada, New Hampshire, Colorado and Arizona. Republican incumbents generally have less contentious races this year but do face notable challengers in Wisconsin and Florida. If Republicans take the majority of one of the chambers of Congress and the country has divided government again, we expect regulatory activity to intensify because the likelihood of major legislation passing is diminished and the administration will be looking for other ways to achieve its policy goals.”
The Government Affairs team is committed to advocate for the interests of Regions and our customers and help ensure the bank has a voice.
Elizabeth Taylor, head of Government Affairs at Regions
“Regardless of what happens with the election or any of the current issues and activities, the Government Affairs team is committed to advocate for the interests of Regions and our customers and help ensure the bank has a voice when hot button issues that impact our business are being discussed and debated,” Taylor said.