The next Congress may be forced to revisit two key components of financial regulatory reform, making the outcome of Tuesday's elections potentially crucial to the future of a landmark Democratic legislative victory.
Federal courts this year have challenged the structure of an agency set up to protect consumers and the ability of regulators to designate financial institutions "too big to fail." Both bodies in question were established by the Dodd-Frank Wall Street Reform and Consumer Protection Act and have been at the center of bitter partisan rancor over how Washington polices the financial industry and business in the Obama era.
Despite challenges from Republicans, the work of rule-writing under Dodd-Frank has largely rested in the hands of regulators since being passed by a Democratic-controlled Congress in 2010. But the legal challenges threaten to punt these issues back to Capitol Hill, where they would be handled very differently based on which party controls Congress.
"Assuming that the rulings are upheld, that really forces the issue. Congress is going to have to do something," said Cornelius Hurley, a Boston University professor and former Federal Reserve official.
The Republicans are widely expected to maintain control of the House, but the Senate could swing to Democratic control. Sen. Mike Crapo of Idaho is expected to assume the Senate Banking Committee chairmanship if Republicans hold the chamber, while Ohio's Sherrod Brown will take the top spot if Democrats prevail.