Wall Street’s Hopes for the New Congress Go From Not-So-Good to Oh Dear

The House Financial Services Committee has long been a coveted gig for any member of the U.S. Congress—Democrat or Republican. The panel helps shape major economic policies but, more important for members perpetually up for reelection, it virtually guarantees access to campaign cash from the banks, hedge funds, and other financial companies keen to keep them happy.

As it seemed more and more likely that the majority would change in the new Congress, Wall Street began directing its political dollars toward moderate Democrats who might be able to counter liberals eager to draw Republican blood. For the first time since 2008, the securities and investment industry spent more on Democratic candidates—$61.1 million—than it did on Republicans, who received just $37.1 million in the midterm election cycle, according to the Center for Responsive Politics. Bankers were never optimistic that a Democrat-controlled House would pass legislation that would benefit them in any major way, but they figured there might still be opportunities for marginal victories on such issues as tweaking anti-money-laundering rules and easing some capital requirements, lobbyists said.