Plausible Scenarios of 2016 Election for CUs Posted by Association of Vermont Credit Unions on 1:05 PM

With the Presidential election tomorrow, CUNA chief advocacy officer Ryan Donovan outlined the five possible outcomes and their impact on credit unions.  Watch for actual analysis of election results on November 9th and later, but in the meantime . . .

1. Status Quo - The status quo scenario assumes that Secretary Clinton is elected president and the GOP retains control of both chambers of Congress.  In this scenario voters are uncomfortable with Trump as president and give the keys to the White house to Secretary Clinton. However, the GOP is tasked with providing checks and balances through control of Congress.  But, Republican leaders will likely control their respective chambers by much narrower margins.
   
   This means for credit unions that the gridlock will ensue, and may even get worse.  A GOP-led Congress won't give Clinton any quarter to advance an agenda.  Instead, it will investigate her and her administration and continue to advance repeal of Obama administration legacy items. There may be opportunity for Congress to pressure the CFPB for improved rule-making; there may be opportunity to use structural changes to the CFPB as leverage for advancing Clinton administration priorities. Since Clinton will find it hard to advance her agenda without compromise, it's possibile that tax reform discussions advance.
2. Conventional Wisdom - Six months this appeared to be the most likely outcome.  It may still be, despite the considerable tightening of the race. This scenario assumes Secretary Clinton is elected president, that Democrats capture control of the Senate and the GOP retains control of the House.  In this scenario Clinton has solidified support in swings states; democratic candidates running underneath her will have made few mistakes; and GOP turnout will have been depressed, endangering incumbent GOP Senators. Turnout is the key driver of success for this scenario.
   
   In this scenario credit unions may see the door open a bit for charter enhancement.  The likely chair of the Senate Banking Committee, Sherrod Brown (D-OH) is a supporter, and Clinton has indicated her support for member business lending changes.  Regulatory relief may have new life given strong support from Senator Brown and the expected ranking member, Mike Crapo (R-ID).  This scenario may open the door some CFPB reforms, particularly given the vulnerability of several banking committee Senators in 2018.  The greatest challenge, however, may securing time on the Senate floor.  Twenty-five Democratic Senators will be up for election in 2018; putting a banking bill on the Senate floor could force uncomfortable votes for these vulnerable Senators.
3. Democratic Trifecta - This scenario no longer seems plausible.  There simply aren't enough House seats in play for Democrats to recapture the majority in the House of Representatives.
4. “Make America Great Again” - As the name suggests, this scenario sees Donald Trump elected as President.  This would be because voters are fed up with the establishment and don't want four more years of Obama or Clinton.  This scenario also assumes the GOP continues to hold both chambers of Congress.
   
   In this scenario, the probability of Dodd-Frank reforms increases significantly.  A moratorium on CFPB rule-making enters the realm of possibility.  And, given the recent court decision related to the constitutionality of the CFPB, it is likely the President would try to fire CFPB Director Cordray.  There wold likely be a slower flow of new regulations.
5. President Trump w/a Democratic Senate - Several months ago this scenario wasn't plausible, now is a possibility.  It assumes that Donald Trump has been elected president and the voters have handed the Democrats a slim majority in the Senate.
   
   The gridlock in Congress continues under this scenario.  Democrats would have much more control over personnel in the Trump administration, and talk of the use of the nuclear option to move Supreme Court nominations might be muted.  Democrats will also have a bit of leverage over the advancement of the Trump legislative agenda, which could force the president to try to accomplish more through executive action.