WASHINGTON — Rep. Jeb Hensarling, a Texas Republican with ties to Lone Star state muni-bond dealers and other financial firms, is most likely to become the next chairman of the House Financial Services Committee in January, according to lobbyists and market sources.

But another possible contender to succeed current chairman Rep. Spencer Bachus, R-Ala., is Rep. Scott Garrett, R-N.J., chairman of the committee’s capital markets and government-sponsored enterprises panel and vice chairman of the House Budget Committee, they said.

Also possible, though perhaps a long shot, is Rep. Shelley Moore Capito, R-W.V., said the sources, who spoke on condition of anonymity.

The chairmanship is expected to open at the end of the 112th Congress, when Bachus reaches a GOP-imposed six-year term limit. Bachus has been committee chairman for two years and was ranking Republican on the committee for the previous four years. The new chairman will be picked by a GOP steering committee after the Nov. 6 elections, according to congressional aides.

“I think its common knowledge on the Hill” that Hensarling, whose home district includes suburbs of Dallas, will take the post, said one lobbyist.

“If [Hensarling] wants it, I don’t know how he doesn’t get it,” said another, who described Hensarling as a fiscal conservative and noted that the lawmaker has a long history of advocating for the elimination of overly burdensome federal regulations.

Hensarling’s staff did not respond to a request for an interview.

Elected in 2002, Hensarling has established a reputation as an outspoken proponent of free-market economics and debt reduction measures. It was in keeping with those views that he criticized a bill in 2009 that would have required credit rating agencies to base general-obligation bond ratings on the likelihood of repayment, a move designed to ensure munis are rated more comparably to corporate bonds. He warned the bill could dictate the methodologies rating agencies use.

“I think [the rating agencies] should be free to use different models and methodology and not have them dictated by Congress,” he said during a House Financial Services Committee meeting that year.

Sources note that Hensarling sponsored the Regulatory Relief Bill of 2005, which included nearly 100 recommendations for easing outdated federal regulations.

He also opposed the $700 billion Troubled Asset Relief Program, which was approved in 2008, and then served on a five-member panel charged with monitoring the U.S. Treasury Department’s distribution of money from TARP and the program’s impact on the economy.

Noe Hinojosa, president of Dallas-based dealer firm Estrada Hinojosa & Co., called Hensarling a “no-nonsense guy” who has dedicated himself to reigning in the country’s national debt.

Hensarling’s mentor was Phil Gramm, the former Texas congressman and senator who was Hensarling’s professor at Texas A&M University, according to Hinojosa.

Hensarling was a summer intern in Washington for Gramm in 1980. A few years later, after receiving an economics degree from Texas A&M and a law degree from the University of Texas, Hensarling rejoined Gramm’s staff as Dallas-based state director.

He also worked as executive director at the National Republican Senatorial Committee in Washington and for firms in Texas such as Green Mountain Energy and hedge fund Maverick Capital.

If appointed chairman of the committee, Hinojosa predicted Hensarling will push an agenda aimed at balancing the budget. He will consider the potential burdens of federal regulations on the budget and on the business community, Hinojosa said.

Hensarling and his political action committee have raised a total of some $5.7 million in campaign contributions since 2007, including donations from at least two Texas-based muni dealer firms, according to documents filed with the Federal Elections Commission.

He has received campaign contributions from executives for at least two Texas-based muni dealer firms and a host of major financial institutions.

Hinojosa and others at his firm contributed $12,000 during the period, and Hill A. Feinberg, chief executive officer of Dallas-based First Southwest Co., contributed $6,000. Feinberg did not respond to a request for comment.

Also during the five-year period Bank of America Corp.’s political action committee and the firm’s staff donated $25,155 to Hensarling, Blackrock Capital Management Inc.’s PAC gave $6,900, Citigroup’s PAC donated $14,000, Goldman, Sachs & Co.’s PAC gave $21,000 and JPMorgan Chase & Co. donated $12,500.

The Securities Industry and Financial Markets Association’s PAC contributed $9,500 during the period, the Investment Company Institute’s PACs donated $20,500, the American Bankers Association’s PAC and its staff gave $30,500, the American Financial Services Association’s PAC donated $22,500 and the Financial Services Roundtable’s PAC gave $9,500.

Chuck Samuels, a lawyer at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, however, cautioned against speculating about the impact that the new committee chair, whoever it may be, could have on the muni market.

He noted also that few congressional members or staffers have an abundance of muni bond experience, partly because municipal securities issues tend be “third-tier” issues for lawmakers.

“I don’t think most members on the committee have spent enough time thinking about tax-exempt bonds,” said Samuels. “I think it’s totally speculative and unproductive to give an evaluation.”

Turnover on the committee’s staff further clouds the crystal ball, Samuels said. Staffers typically frame the issues for lawmakers and draft legislation, meaning they can have as much impact on the committee’s agenda as members, he said. Still, muni market participants say Hensarling has proved himself a fiscal conservative who is wary of federal regulation.

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