Congressional alignment, plus economic upheaveal, equals historic regulations
But regulators and markets aren’t the only ones who crave the status quo.
One of the most difficult aspects of a compliance professional’s life is keeping track of new and changing laws and regulations, not to mention how those changes impact the company’s or client’s business.
For compliance and risk management professionals seeking to set themselves apart from their peers, specialized knowledge and skills are crucial. This is especially true in today’s politically divided America.
Ideally, federal legislation would be speedy and proactive, passed in a bipartisan compromise furthering the timely interests of people and policy over party and power.
Reality seldom matches the ideal.
All too often, federal laws are sluggishly passed either in response to significant events or as part of reactionary, pendular swings in political ideologies.
Consider, for example, the first major acts regulating the sale and exchange of securities, the Securities Act of 1933 and the Securities Exchange Act of 1935.
Both were signed into law in response to the causes of the Great Depression.
Similarly, the events of 9/11 produced the USA Patriot Act in 2001. In response to another economic crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010.
Other times, legislation is enacted less in response to events as much as because a shift in voter sentiment vests control of the congress and presidency in a single party.
Examples of laws enacted by a unified government include the Fair Labor Standards Act of 1938 and the Civil Rights Act of 1964. More recently, a unified government enacted the Affordable Care Act (“Obamacare”) in 2010.
Of course, many factors contribute to the passage of any federal legislation—the Patriot Act passed when Republicans controlled government, and the Civil Rights Act was enacted in response to the Civil Rights Movement.
But January 2021 marks only the 23rd time since 1933 that both houses of congress and the presidency have been controlled by the same political party and only be the 6th time in the past 40 years.
If history is our guide, then we should expect the current unified government to pass new legislation, rollback or amend existing laws, and generate a host of implementing regulations with which our citizens and industries must comply.
Surely, de-fi and crypto will be in the eye of this cyclone of change. From the perspective of the practitioner, 2021 will be a very busy year career in compliance.