Democrats sweep Congress, setting up years of oversight for banks

• What’s at stake: For financial companies, two years of Democratic control of Congress likely means heightened oversight, although the party’s main targets will be President Trump and his affiliated companies. 
• Forward look: The strength of Democrats’ victory means the party will be emboldened on a range of issues and will raise scrutiny of large companies of all stripes, including private equity and Wall Street firms. 

WASHINGTON — Democrats won a commanding victory in the 2026 midterm cycle, reaching deep into Trump country in a repudiation from voters of the administration and the economy. 

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Democrats’ wins stretched from South Carolina to Texas, Iowa and Kansas, flipping seats that weren’t seen as realistic targets even a few months ago. As of late Tuesday evening, the Associated Press had called the Senate for Democrats and appeared poised to take control of the House next year as well. The decisiveness of Democrats’ victories means an emboldened party, and potentially a more progressive one has they position themselves to make an argument for why voters should entrust them with the White House in 2028. 

With the White House still in Republican control for the next two years, Democrats will likely focus their efforts on aggressive oversight of the administration and big business, including Wall Street banks. Without control of the White House or a veto and filibuster-proof majority in the Senate, bold legislative initiatives are unlikely to get off the ground in the 120th Congress. President Trump said in a television interview Tuesday night that he would accept the results of the election.

But regardless of the prospects for big legislative swings, Democrats will still take the gavels of powerful committees, giving them more power to push back and investigate the actions of the Trump administration and its private company connections. 

Experts anticipate that crypto will be at the top of the list for financial companies, as well as banks that have connections to Jeffrey Epstein. Prediction markets are also on the list, and bank chief executive hearings are likely to return. 

In the House Financial Services Committee, Rep. Maxine Waters, D-Calif., will likely become the chair again of the panel. Sen. Elizabeth Warren, D-Mass., the key architect of the Consumer Financial Protection Bureau, will likely hold the gavel of the Senate Banking Committee.

Control of the panels means that Waters and Warren will control the hearing schedule, can block future Trump administration nominees, dictate most of the witnesses for hearings and issue subpoenas. Limited opportunities for legislating might include credit cards, stock buybacks or potentially deregulation for the smallest banking institutions, if those are tied into larger, must-pass laws like budget or defense spending. 

They can also push for nominees to boards that are meant to be bipartisan, like the Federal Deposit Insurance Corp. and the credit union regulator. They can call up the heads of agencies, particularly the CFPB, who are meant to regularly testify in front of Congress.

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The election results are also a defeat for the crypto industry. Fairshake, a crypto-funded super PAC, spent huge amounts of money to defeat Sherrod Brown, the returning lawmaker who was previously the chair of the Senate Banking Committee. The industry spent very little on Democratic races, grinding their legislative agenda to a halt for at least the next few years. Because senators have six years, it’s likely set the prospects for market structure legislation longer than just the incoming Congress. 

“Corporations, billionaires tried to buy this election,” Brown said in his victory speech in Ohio. “You know that, but as it turns out, as it turns out, there are a whole lot more of us than there are [of them].” 

Brown’s victory is just one that bankers watched carefully on Tuesday evening. North Carolina elected Roy Cooper to the U.S. Senate, who will likely sit on the Senate Banking Committee because of the state’s booming banking industry. Sen. Roger Marshall lost in Kansas, a rare example of the banking industry coming out against a prominent Republican candidate. Adam Hamitlon, a minister, will instead be the first Democratic senator from Kansas in nearly a century. Andy Barr, an active House Financial Services Committee Republican on banking issues, was elected to the Senate in Kentucky. 

Vulnerable House Financial Services Committee Republicans also were unseated. Rep. Anne Wagner of Missouri, who was chair of the House Financial Services subcommittee on financial markets, lost to a Democratic challenger. Reps. Tim Moore of North Carolina, Bryan Steil of Wisconsin and Bill Huizenga of Michigan also looked vulnerable, although the Associated Press hadn’t called their races as of late Tuesday evening.