Hello, LOs!
This week, a spat between Republicans and Democrats on the Senate Banking committee held up five nominations at the Federal Reserve and the Federal Housing Finance Agency.
Republicans on the Senate Banking Committee skipped the scheduled vote, which prevented the committee from having a quorum. The minority party said there were unanswered questions over the business dealings of one nominee, Sarah Bloom Raskin, who was nominated to be vice chair for supervision of the Federal Reserve.
The move also prevented votes on the other nominees, including Sandra Thompson, up for FHFA director, Lael Brainard, who Biden nominated to the number two position at the Federal Reserve, as well as Fed Chair Jerome Powell.
What could the holdup of their confirmations mean for housing policy in the short term?
There are a number of matters at both the FHFA and the Federal Reserve pertaining to housing. That's in addition to, in the case of the central bank, managing inflation and interest rates, which also has an immediate and direct impact on mortgage lending.
Both of the GSEs' proposed Duty to Serve underserved markets plans for the coming years were rejected, and while Fannie Mae has re-submitted theirs to FHFA, it's not clear when the plan will be ratified by FHFA, and take effect. The enterprises' Equitable Housing Finance Plans, which were planned to be implemented at the start of the year, have also yet to be approved.
Uncertainty about confirmations, at the very minimum, is an unwelcome distraction from the business of governing. But one thing to bear in mind is that Brainard, Powell and Thompson are already on duty at their respective agencies.
Powell's four-year term as Fed chair was set to expire Feb. 5 — before his confirmation vote — but on Feb. 4 the Fed voted to name him chair pro tempore, at least while his confirmation is before the senate.
At the FHFA, Thompson has been acting director since last year. Brainard is already a governor at the Fed, where she has led an interagency effort to overhaul the CRA. And there will be developments on the CRA modernization front in the "not-too-distant future," in the form of a notice of proposed rulemaking, according to remarks this week by Office of the Comptroller of the Currency Acting Director Michael Hsu.
And so far, the White House is digging their heels in on its slate. White House Press Secretary Jen Psaki told reporters yesterday that Biden is "not advocating for splitting the nominees," and accused Republicans of being "AWOL" at a "pivotal moment."
LOs, while partisan disagreement holds up nominees at such crucial institutions for housing finance, should those nominees play it safe in the meantime? Do you expect they will put off any policy changes that could rock the boat, to keep from spoiling their confirmation?
Georgia Kromrei
Senior Mortgage Reporter, HousingWire
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