It's fitting for a state that's home to the largest banking center outside of lower Manhattan that whoever wins this year's race for U.S. Senate in North Carolina stands to have a stake in the expected congressional push to boost regulation of the financial industry.
Facing re-election for the first time, Republican Sen. Elizabeth Dole sits on the Senate committee that oversees banking.
Her Democratic challenger, Kay Hagan, worked in the industry for years. She is a budget writer in the N.C. Senate and could be a natural fit for the panel.
Though the two candidates largely hold the same opinions about the federal government's response to the financial crisis, they differ on what direction Congress should take, including what regulations are needed to prevent such a meltdown from happening again.
Dole proposes allowing people to access their retirement accounts without incurring taxes and penalties, and granting a significant tax credit tied to the purchase of a home.
She also wants lawmakers to consider eliminating “mark-to-market” accounting rules, which require banks to value their assets at current market prices.
Hagan believes in expanding predatory lending laws to cover mortgage loans and has slammed CEOs for taking massive pay packages. She wants to repeal President Bush's tax cuts for the wealthy and offer more to the middle class, such as a standardized child care tax credit and an expansion of the tuition tax credit.
“The (solution) is not giving corporate CEOs everything they want, not having the market do what the big corporations want,” Hagan said. “We've got to be looking at what is good for middle income workers in North Carolina.”
Both candidates said Congress will need to rethink the entire structure of regulating Wall Street, bringing it up to date and ensuring that it keeps pace with moneymakers always in search of new ways to turn a profit. They also want to reorganize regulating agencies to improve federal oversight.
Each vows to push for increased transparency and new rules to cover derivatives, including “credit default swaps” that promise payment to investors if there is a default. Several firms have lost huge sums on such products.
It's a crucial issue in North Carolina, which has seen both sides of the Wall Street turmoil. Charlotte-based Bank of America is acquiring Merrill Lynch and is one of nine banks participating in a federal cash infusion program.
But its cross-town rival Wachovia Corp., once the nation's fourth largest bank, succumbed and was forced to sell itself to Wells Fargo & Co.
North Carolina is also home to large regional banks: Winston-Salem-based BB&T Corp., and Raleigh-based RBC Bank and First Citizens Bank.