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On December 2, 2020, the U.S. House of Representatives approved the Holding Foreign Companies Accountable Act (Act). The Act is identical to the bill the U.S. Senate passed in May 2020. Most significantly, the Act requires the U.S. Securities and Exchange Commission (SEC) to prohibit the securities of foreign companies from being listed or traded on U.S. securities markets if the company retains a foreign accounting firm that cannot be inspected by the Public Company Accounting Oversight Board (PCAOB) for three consecutive years, beginning in 2021, because the accounting firm is located in a foreign jurisdiction that does not permit PCAOB inspection.
TAKEAWAYS
A closely divided Congress will limit financial services legislation but Biden appointees in key regulatory positions will have a large impact on the financial services policy agenda.
The Biden administration is likely to support fintech companies that are developing innovative financial products and services while increasing focus on consumer protection regulatory and enforcement priorities.
Although financial services regulation did not receive significant attention during the 2020 election campaign, President-elect Biden could have a significant impact on policies affecting financial institutions across the landscape. During the campaign, President-elect Biden supported proposals to expand access to banking services and financial products to the underserved and address disparate access to and treatment by the financial system.