Wall Street is losing a close ally with the shocking defeat of House Majority Leader Eric Cantor to tea party candidate Dave Brat in a GOP primary race, Politico reported.
The Virginia Republican was seen as getting things done on Capitol Hill when it came to overhauling the mortgage finance market, terrorism insurance, taxing financial institutions, and flood insurance.
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Lobbyists on K Street with major banks as clients were able to approach Cantor on policy issues, and one industry source told Politico that he was "one of the few remaining House Republicans who understood the complicated and nuanced issues facing the financial services community."
The insider added, "When Dave Camp abandoned the business community with his tax reform draft, Cantor was incensed and promised to stand strong."
He was referring to the House Ways and Means Committee chairman’s proposal earlier this year to offset some of the cost of tax reform by taxing Wall Street banks.
A banking lobbyist told the political news website that Cantor "had a firm grasp of financial services issues and the impact of those issues on the industry and consumers."
Cantor’s association with Wall Street has sometimes resulted in tense confrontations with other House Republicans, notably House Financial Services Chairman Jeb Hensarling.
When Cantor introduced a bill in March to halt flood insurance premium hikes, Hensarling opposed the legislation, saying it went too far in reducing the program enacted in 2012.
Although the bipartisan measure passed the House, the bill angered conservative groups, with Brat attacking it during his campaign as an example of Cantor’s support for "big government."
"We think that more people should be following Jeb Hensarling’s lead on conservative policy," Barney Keller, spokesman for the conservative Club for Growth told Politico at the time. "It’s a shame that Republican leaders try and stifle conservative policy instead of pushing moderates to support conservative policy."
Cantor’s pending exit, ironically, now leaves an opening for Hensarling to assume a leadership role.
"He was positioning himself anyway," one industry source told Politico. "Now with Cantor out he will make a move before the young bucks move."
Hensarling’s potential rise to power, however, could mean changes on how Washington deals with Wall Street because the Texas Republican likes to tout that he is pro-free markets, not pro-business, Politico added.
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