In the coming days, there will be no shortage of election analysis.  Indeed, CUNA will publish its own analysis of the elections through the credit union lens shortly after the major races have been called.  As we approach this historic election, however, we have given some high level thought to the possible outcomes and the impact on credit union priorities.

When we began thinking about this after the major party nominations had been secured by Secretary Clinton and Mr. Trump, we identified four plausible scenarios:  status quo, conventional wisdom, Democratic trifecta and “Make America Great Again.”  Days out from the election, three of these remain plausible and another one may have emerged.  We’ll explore the universe of the plausible and what it means for credit unions.

Scenario #1 – Status Quo

The status quo scenario assumes that Secretary Clinton has been elected president and the GOP retain control of the House and the Senate.  Under this scenario, the electorate is uncomfortable with Trump as president and gives the keys to the White house to Secretary Clinton, but tasks the GOP with providing checks and balances.  In the last several weeks, we’ve seen a number of Republicans running for the House and the Senate run ads essentially making this case.  It is worth noting though that the Republican leaders will likely control their respective chambers by much narrower margins.

For credit unions, this means that the gridlock in Washington will ensue, and it could get even a bit worse.  We don’t see a GOP led Congress giving Clinton any quarter to advance an agenda.  Instead they will investigate her and her administration and continue to advance repeal of Obama administration legacy items.  In this environment, there may be opportunity to use Congress to pressure the CFPB for improved rulemaking; there may be opportunity to use structural changes to the CFPB as leverage for advancing Clinton administration priorities.  Given the fact that Clinton will likely find it hard to advance her agenda without compromise, it is within the realm of possibility that tax reform discussions advance.

For credit unions, this means that the gridlock in Washington will ensue, and it could get even a bit worse.  We don’t see a GOP led Congress giving Clinton any quarter to advance an agenda.  Instead they will investigate her and her administration and continue to advance repeal of Obama administration legacy items.  In this environment, there may be opportunity to use Congress to pressure the CFPB for improved rulemaking; there may be opportunity to use structural changes to the CFPB as leverage for advancing Clinton administration priorities.  Given the fact that Clinton will likely find it hard to advance her agenda without compromise, it is within the realm of possibility that tax reform discussions advance.

Scenario #2 – Conventional Wisdom

Scenario #2 is called the conventional wisdom scenario because six months ago when we began thinking about this, it appeared to be the most likely outcome.  It may still be, despite the considerable tightening of the race. This scenario assumes that Secretary Clinton is elected president, the Democrats capture control of the Senate and the GOP retain control of the House.  For this scenario to happen, Clinton will have solidified her support in swings states; Democratic candidates running underneath her will have made few mistakes; and GOP turnout will have been depressed, endangering incumbent GOP Senators.  Some of these dynamics have emerged throughout the campaign and in the polling.  Turnout is the key driver of success for this scenario.

Credit unions, under this scenario, may see the door open a bit for charter enhancement.  We will have a supporter in the expected chair at the Senate Banking Committee, Sherrod Brown (D-OH) and Clinton has indicated her support for member business lending changes.  Further, regulatory relief may have new life in it given the strong support that Senator Brown and his expected ranking member, Mike Crapo (R-ID), are strong supporters of community based financial institutions.  This scenario may open the door a bit for CFPB reforms, particularly given the vulnerability of several Senators banking committee Senators in 2018.  The greatest challenge to moving these issues may not be in the Banking Committee itself, but securing time on the Senate floor.  Twenty-five Democratic Senators will be up for election in 2018; putting a banking bill on the Senate floor could force uncomfortable votes for these vulnerable Senators.

Divided government also has the potential to create compromise.  With Congressional leaders looking for victories, especially in advance of the 2018 election, and President Clinton working to solidify her legacy there is the opportunity that some in Congress may be willing to seek the middle ground.

Scenario #3 – Democratic Trifecta

Heading into the days of the cycle, this scenario does not seem plausible any longer.  There simply are not enough House seats in play for Democrats to recapture the majority in the House of Representatives.

Scenario #4 – “Make America Great Again”

As its name suggests, this scenario envisions the election of Donald J. Trump as President of the United States.  If this happens it will be because the electorate is fed up with establishment, does not want four more years of Obama or Clinton.  This scenario also assumes the GOP, either because or in spite of Trump, holds both chambers of Congress.

Under this scenario, the probability of Dodd-Frank reforms increases significantly.  A moratorium on CFPB rulemaking enters the realm of possibility.  And, given the recent court decision related to the constitutionality of the CFPB, it is likely that President Trump would try to fire CFPB Director Cordray.  In general, we would expect a slower regulatory flow under this scenario; however, given how Mr. Trump has run his campaign, it’s hard to know for sure what to expect from a Trump administration.

Scenario #5 – President Trump with a Democratic Senate

We didn’t think this was plausible several months ago, but in the closing days of the election, a fifth scenario has presented itself.  It assumes that Donald Trump has been elected president and the voters have handed the Democrats a slim majority in the Senate.

The gridlock we have experienced in Congress is likely to continue under this scenario.  Democrats would have much more control over the personnel in the Trump administration, and at least for the time being, talk of the use of the nuclear option to move Supreme Court nominations might be muted.  Democrats will also have a bit of leverage over the advancement of the Trump legislative agenda, which could force the president to try to accomplish more through executive action.

So what will happen?

We’ll find out Tuesday.  I’ve listed the scenarios above (excluding Scenario #3) in order of probability from my perspective.  But the voters will decide, and regardless of outcome, we are well positioned to represent credit unions in the new administration and the new Congress.