Why bankers predict a Harris win despite favoring Trump

October 23, 2024 9:00 AM

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The presidential election is drawing ever closer, and bankers are still split on which candidate is most likely to sit in the White House come next year.

Fall election survey data gathered by Arizent, the publisher of American Banker, found that 59% of a total 191 respondents said Democratic front-runner Kamala Harris is the most likely winner of the election. Roughly 41% of bankers polled selected former President Donald Trump as November's winner.

Interestingly, 58% of bankers surveyed felt that a Trump administration would be better for their industry and individual companies, against 35% who said Harris would be best for the banking industry. That same perspective was found in similar questions about which election outcome would yield the best outcome for regulatory and policy matters, as well as the country overall.

"This election is lighter on policy details than any in recent memory, so all of us are forced to do a bit more extrapolating than we are used to," Isaac Boltansky, managing director and director of policy research at BTIG, said in an interview with American Banker's Claire Williams.

While on the campaign trail, Trump has been bullish on the future of cryptocurrency in the U.S. and identified the digital-asset sector as one of the key areas needing regulatory easing.

"Instead of attacking industries of the future, we will embrace them, including making America the world capital for crypto and bitcoin," Trump said during a speech at the Economic Club of New York in September.

Other key components of the Republican platform include lowering the corporate tax rate from 21% to 15% and expanding research tax credits. Harris seeks to do the opposite, proposing to raise the corporate rate to 28% in addition to a 28% capital gains tax for those earning $1 million or more per year.

Outside of taxes, Harris' focus lies on addressing the affordable housing disparity in the United States. Her proposals include subsidies for first-time homebuyers, tax credits for apartment developers and reducing regulatory red tape involved in the homebuying process.

"In terms of where the vice president's coming from and where we're coming from, we know that there's not going to be a single solution to the housing affordability and supply crisis — it's never either/or, it needs to be yes/and, and we want to be part of it," Ryan Donovan, president and CEO of the Council of Federal Home Loan Banks, said in an interview with American Banker's Kate Berry.

Read on for the latest American Banker insights into recent election developments and what the banking industry should be aware of.

Policy hints offer insight into Harris, Trump priorities

The election is close at hand, but bankers are still struggling to pin down what each administration could bring to the financial services industry at large come next year.

Trump has been vocal in recent weeks on policy proposals ranging from establishing a sovereign wealth fund as backing for infrastructure projects to a temporary 10% cap on credit card interest rates, but has been notably fluid when it comes to nailing down his stance on specific points.

Harris has remained focused on addressing the housing crisis as a core platform position since her endorsement as the Democratic front-runner. She has pledged to build roughly 3 million homes and apartments if elected president, as well as launch subsidy programs for first-time homebuyers in need of aid.

"What's unique and challenging about this election is that both candidates are unclear as to what they'll do," Aaron Klein, a senior fellow in Economic Studies at the Brookings Institution, told American Banker's Claire Williams.

Read more:

Flying blind: Bankers lean on policy glimpses to evaluate Harris, Trump

Crypto’s growing presence in the 2024 presidential election

Cryptocurrency and other digital assets are now a dominating corporate interest in the election and could stand to overshadow the efforts of banking advocates.

A recent report from Public Citizen, a nonprofit dedicated to consumer advocacy causes, found that crypto corporations have spent more than $119 million on political causes in 2024, mostly into a nonpartisan super PAC for backing pro-crypto candidates. This amount was roughly 44% of all corporate funds distributed during this election cycle.

"We've never seen anything like this before, and I think it's pretty amazing to take a step back and say this is about a 15-year-old industry and we've come such a long way," Patrick Kirby, policy counsel at the Crypto Council for Innovation, said in an interview with American Banker's Claire Williams.

Looking further back, since 2010, crypto spending on elections is second only to that of fossil fuel corporations.

Read more:

Welcome to the crypto election

What does the future of interchange look like?

Trump and Harris have been notably quiet on a number of key banking issues, but advocates predict that the track records and allies of both candidates will create a tougher regulatory environment for the payments landscape in the coming years.

Interchange fees, which are incurred between the consumer and merchant banks to account for the cost of processing card payments, have been a hotly debated topic among regulators and the Supreme Court for the last few years.

Even with the proposal this year by Visa and Mastercard to reduce and limit credit card interchange rates as part of a settlement, which was rejected by merchants as insufficient, the charges are still being widely debated in Congress and on a state level.

"I think the payment industry is going to have to steel itself for a challenging four years no matter who wins," Eric Grover, a principal at Intrepid Ventures, said in an interview with American Banker's John Adams.

Read more:

The politics of payment fees: Harris, Trump and the future of interchange

Walz and Vance debate the causes of high housing costs

Minnesota Gov. Tim Walz and Sen. J.D. Vance, R-Ohio, agreed during a debate on Oct. 1 that high housing costs present a concern for the American public. As for the factors driving the trend, they did not find common ground.

Following Harris' platform on addressing the housing crisis through policies on subsidies and rentals, Walz stressed the point that housing is more than just an asset.

"This issue of housing — and I think those of you listening on this — the problem we've had is that we've got a lot of folks that see housing as another commodity," Walz said. "It can be bought up, it can be shifted, it can be moved around. Those are not folks living in those houses."

Vance highlighted both Harris' tenure as vice president under the Biden administration and the policies released by the administration itself as driving forces behind inflation and other economic issues.

"If she wants to enact all of these policies to make housing more affordable, I invite her to use the office that the American people already gave her, not sit around and campaign and do nothing while Americans find the American dream of homeownership completely unaffordable," the senator said.

Read more:

'A house is more than just an asset': Walz and Vance clash in VP debate

Banking on politics: CEO of Sunwest Bank eyes Senate seat

"We are the entities that provided the liquidity and cash to the economy. … Like a gas station, if banks aren't operating well, the traffic on the road is going to slow down [and] if prices are too high, traffic is going to slow down," Eric Hovde, chairman and chief executive of Sunwest Bank, said in an interview with American Banker's Claire Williams.

Hovde is running once again, following his first attempt in 2012, as the Republican Senate nominee for Wisconsin seeking to dethrone Democrat Tammy Baldwin, who is going for her third term in office. As the election draws nearer, so too do Hovde's chances.

His platform focuses on using his banking experience and vision for the U.S. economy to align with voters to bring a level of "financial sophistication" to the Senate.

"That's a big reason I got into this race," Hovde said. "We're bankrupting our country, we're putting our financial system at risk."

Read more:

Meet the banker running for Senate in Wisconsin