FHFA nominee Thompson defends recent changes, supports reform

FHFA nominee Thompson defends recent changes, supports reform
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Sandra Thompson, director of the Federal Housing Finance Agency (FHFA) running for US President Joe Biden, listens during the Senate Committee on Civil, Banking, and Housing confirmation hearing in Washington, D.C., US, Thursday, January 13, 2022. Thompson, the professional government official who leads FHFA on the basis of representation, if confirmed will run the organizer Fannie Mae and Freddie Mac permanently. Photographer: Bicyclists/Bloomberg

Bicyclists / Bloomberg

The Biden administration’s nominee to head the Federal Housing Finance Agency deviates from her predecessor in several ways, but some of her comments in the Senate on Thursday, Sandra Thompson, partially echoed those of former Trump-appointed administrator Mark Calabria.

When asked during her hearing if she would release two government-sponsored institutions the agency oversees from conservatorship, Thompson said it was up to lawmakers to decide.

The current Acting Director of the FHFA said in the comments that – at least in one respect – it was similar to that Made by former manager Mark Calabria At the 2019 hearing

said Thompson, who would become the first African-American woman to head an agency if confirmed.

So far, many efforts of legislators and the previous administration to reform these two regions, which came under tutelage during the Great Recession, have failed; Thompson acknowledged their situation as the government wings lasted longer than expected.

“Certainly no one ever expected the companies or any financial institution to remain in tutelage for 13 years,” she said.

Thompson said she would be willing as the FHFA director to help put GSEs out, but added that Congress would need to take action on any changes to their structures, which were initially created through legislation.

“If the companies come out of conservation, will the companies be private, will they be public? In what form will they be? There is just a whole lot of issues that need to be taken into account, that Congress has to think about; but certainly the FHA can help,” Thompson said. Companies are geared up.”

Thompson also answered questions about the adequacy of Fannie Mae and Freddie Mac’s capital, and whether Recent changes To suggestions about it can weaken it.

She defended these and other recent FHFA policy actions in front of her main critic during the hearing, Senator Pat Toomey, R.-Pa, who serves as the top Republican on the Senate Banking Committee. question partial reflection of a policy put in place under the previous administration that would shrink GSE’s footprint in the housing market, saying that could expose Fannie and Freddie to new risks. also criticized Recently proposed goals for racial equality In Fannie and Freddy.

“I am concerned that the administration is seeking to use the FHFA and GSEs to take more risks to taxpayers and expand affirmative action in housing,” Tommy said.

Thompson said risk mitigation and adequate capital would be a top priority if confirmed.

“The housing safety of GSEs, Fannie Mae and Fred Mac in particular – they’ve just been allowed to build capital, keep profits – we think that’s very important,” Thompson said.

A move aimed at encouraging wider use of Credit risk transfers Allowing private investors to absorb some of GSE’s losses would help achieve that end, Thompson said.

Thompson also reaffirmed the FHFA’s commitment to its fair housing plan when other senators, unlike Tommy, Ohio Senate Banking Committee Chairman Sherrod Brown, questioned whether it had gone a long way in addressing inequalities between property rates The raised homes of the white members. of their constituencies and relatively less for Hispanic residents in the states they represent, especially given that other agencies such as the Federal Housing Administration have been able to do more to that end.

“What should GSE do to make sure it serves borrowers of color?” asked Brown Thompson.

“We believe these fair housing schemes will go a long way to helping minority homeowners in underserved communities across the country obtain mortgage credit,” Thompson said.


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