As political gridlock in Washington continues to dominate the headlines, interest groups are increasingly focusing on state governments to achieve their legislative goals. With Congress bogged down by partisanship and an inability to pass significant legislation, industries that once depended on federal action are now looking to the states for solutions.
Stalemate in Washington: Industry Concerns
The ongoing federal gridlock is not new, but its consequences for the equipment leasing and finance industry have become increasingly apparent. The industry relies on clear and consistent rules to operate across state lines and, in many cases, across borders. However, with federal agencies and Congress locked in partisan disputes, there has been little movement on key issues that require national coordination.
One such area is data privacy and security. Federal lawmakers have debated comprehensive data privacy laws for years, but progress has been minimal. For an industry like financial services, which relies heavily on secure handling of sensitive financial data, the absence of federal standards creates uncertainty and operational challenges. In response, many states have taken the lead, passing their own privacy regulations to fill the federal void.
Another area of concern is when interest groups lump all financial transactions together and pursue one-size-fits all legislative solutions. This trend, which is particularly prevalent in states like New York, California and Illinois, presents challenges for the equipment leasing and finance industry. The challenge lies in ensuring that state legislation doesn’t overburden businesses with costly compliance mandates.
Building State-Level Coalitions
The growing importance of state legislation means that the equipment leasing and finance industry must prioritize building coalitions at the state level. These coalitions won’t just be with the usual suspects of business groups but must include groups that we traditionally haven’t worked with, including some of the groups advocating for the legislation we oppose. What this looks like in practice is working together on issues where we agree, compromising in areas where we can, and disagreeing without being disagreeable in areas where common ground isn’t in the cards.
Elections Have Consequences
There’s a range of possible outcomes at the federal level for the elections and all of the likely scenarios point to increased action in the states. One of the possible scenarios is a closely divided House and Senate both under Republican control, and a Republican President. This would make the situation in the states more challenging because every advocacy group that can’t advance consumer protection legislation at the federal level will look to the states where they think they can. A second scenario is a Democratic president with Republicans controlling one but not both chambers of Congress. With the overturning of the Chevron doctrine reducing the power of Executive Branch agencies and the likely legislative stalemate that would occur in this situation, this would also lead to advocacy groups turning to the states with both the regulatory and legislative routes being impeded at the federal level. Even in the slightly less likely scenario of a Democratic sweep, the overturning of the Chevron doctrine and closely controlled chambers of Congress will likely point to increased action at the state level.
Conclusion
As federal stalemate continues to stall legislative progress, the equipment leasing and finance industry is finding new opportunities and challenges at the state level. State governments are increasingly filling the void left by Washington. By adapting the way we approach state-level advocacy, we can continue to shape the policies that impact the equipment leasing and finance business, even in an era of federal gridlock.
