If Democrats capture a chamber of Congress in November's midterm elections, they would be hard-pressed to stop the deregulation now underway for banks and crypto firms. What they would gain is subpoena power, larger investigative staffs, and a platform to apply pressure through hearings rather than legislation.

Every two years, the US midterm elections put all House seats and part of the Senate up for a vote. Whoever wins a chamber takes its committee chairs, and with them control of hearings, subpoenas, and oversight of the administration. New laws, meanwhile, would still run into a veto from Republican President Donald Trump. Since taking office, the Trump administration has loosened rules and oversight for banks, crypto firms, and prediction markets, with the aim of keeping capital and jobs in the United States. Because that easing has been carried out through the agencies themselves, legislation can hardly reverse it. Ahead of the November 3, 2026 vote, polls show Democrats as favorites for the House and slightly ahead in the Senate.

Subpoena power, but no legislative brake

In Congress, the authority to issue subpoenas rests with committee chairs from the majority party. If Democrats win only one chamber, their oversight would therefore be confined to it. There, they could expand their investigative staffs and summon agency heads and chief executives to testify, backed by subpoenas that are legally enforceable and can be pursued as contempt of Congress if defied. Legislation, by contrast, could not stop the agenda: the deregulation runs through administrative law — decisions made by the agencies themselves — and while Congress can pressure that path through hearings, it cannot block it by law. Reversing those agency decisions would generally require the agencies to run the rulemaking process again.

The pressure would still be real. Industry representatives expect that the heads of bipartisan bodies in particular cannot simply ignore requests from Congress, and that they could act more cautiously on highly contested issues as a result. Requests and hearing preparation also consume time that is then unavailable for policy work. Friction already exists: the administration's regulators are granting banks major capital relief and have already clashed with Democrats in hearings.

Markets and forecasting models put the odds of a shift in power only within a wide range. As of publication, Polymarket gave Democrats 91% for the House and 63% for the Senate, and priced a win in both chambers at 62%. Kalshi had the party at 61% in the Senate. The election models showed an even wider spread: the Silver Bulletin put Democrats at about 93% in the House and about 75% in the Senate, while Poliwave arrived at 84% and 61%, respectively. Notably, prediction markets here serve both as a barometer of the election and as a target of the announced oversight.

Waters, Warren, and Casten could shape the committees

In the House, Maxine Waters is the ranking Democrat on the House Financial Services Committee — the minority's lead member on the panel and, by custom, the party's path to the gavel. As its former chair, she called the CEOs of the largest US banks to testify, and observers expect such appearances again should she return to the chair. In the Senate, Elizabeth Warren is the ranking Democrat on the Senate Banking Committee and favorite to take over its gavel — though her criticism of late has focused more on large AI companies, which she accuses of enjoying special access to the government and influence over policy. Both lawmakers also repeatedly raise high housing costs and criticize the rollback of consumer protection.

For the crypto industry, a different personnel question is more sensitive: the possibility that Representative Sean Casten could challenge Waters for the Financial Services chair. In September, Punchbowl News reported that Casten had considered such a move; his spokesperson did not comment. His record explains the concern. In 2024, he introduced a bill targeting crypto tools that, in his view, facilitate money laundering. A year later, he voted against the CLARITY Act the planned market structure law for crypto, citing risks to Americans.

Lawyers and analysts name other likely committee targets as well. These include looser bank supervision with reduced enforcement, Wall Street's role in financing the AI boom and new data centers, and the finance industry's influence on housing and the cost of living. For now, all chair posts remain expectations, with no final decisions yet.

Prediction markets and Trump ties in focus

According to earlier media reports, Democrats are preparing investigations into President Trump and his family over their ties to the crypto and prediction market industries. They view these business dealings as a conflict of interest, and such probes would also reach companies that do business with the president's family.

At the same time, Democrats are calling for greater oversight of prediction markets, on which users bet on the outcome of real-world events through contracts. In their view, these markets open new avenues for abuse and pose a national security risk, since government insiders could leak confidential information. The operators, for their part, stress that they actively fight abuse. In late September, Ro Khanna, a Democrat on the House Oversight Committee, likewise weighed in, seeing a need to scrutinize crypto transactions on national security grounds.

The White House did not respond to a request for comment on the Democrats' plans. Earlier, in September, a spokesperson had accused the opposition of trying to block the president's agenda and attack him without cause.

After the midterms, crypto firms mainly face headlines

For companies, congressional oversight usually translates into legal and advisory costs. According to lawyers and analysts, however, negative headlines and reputational damage weigh more heavily. Early signs are already visible: lawyers report that clients have already received letters from investigators about their contacts with the administration, and law firms are preparing their clients for such inquiries to turn into formal investigations.

Past hearings show how far this pressure can reach. After hearings before Congress, major banks changed their overdraft fees and fraud protections. At Wells Fargo, CEO John Stumpf resigned abruptly in 2016 following hearings on the fake accounts scandal — and in the end, no change in law was required. In early October, the online broker Webull demonstrated how quickly congressional findings can hit share prices: after the House's bipartisan Select Committee on China published a report on the company's China ties, the stock fell to a near four-month low. That was a congressional finding, not an action by the SEC or FINRA. Webull disputes the report and points to inaccuracies in it.

Crypto legislation, too, depends on the balance of power in Congress. On September 15, 2026, the Senate rejected a procedural motion on the CLARITY Act by 49 votes to 50; passage would have required 60 — the bar the chamber sets for ending debate on most legislation. As a result, a new attempt must wait for the new Congress in January 2027 — possibly under Democratic leadership, and any such attempt would again have to make its way through the committees whose gavels are at stake.

Source: Crypto Valley Journal