WASHINGTON — A Republican and a Democrat on the House Financial Services Committee both made the case for legislative housing finance reform on Tuesday.
Enacting GSE reform faces a whole host of obstacles, not the least of which is a divided Congress, and the administration has signaled its desire to shake up Fannie Mae and Freddie Mac. But Rep. Lacy Clay, D-Mo., the chairman of the housing subcommittee, and Rep. Sean Duffy, R-Wis., the ranking member, both agreed that congressional action was a priority.
Duffy even expressed optimism that Congress could act in the current legislation session.
“I think housing finance reform is important, and I think we might have a shot at doing that,” said Duffy, speaking with Clay on a panel at an event hosted by the Department of Housing and Urban Development and the National Association of Homebuilders. “The status quo I think gave us the ’08 crisis, and there hasn’t been significant changes.”
Clay was more cautious, emphasizing that while the desire for reform is present, the political will is “not quite there yet.” Yet he added that if the committee could connect GSE reform to broader economic concerns, the odds of bipartisan movement behind a housing finance bill could go up.
“We know the residual effects of putting a family into a home and how that creates jobs, so we have to make the common sense case for that to our colleagues and to this administration,” said Clay.
Their discussion came just two months after Mark Calabria was sworn in as director of the Federal Housing Finance Agency, where he has already promised to move toward ending the conservatorships of Fannie and Freddie, with or without Congress.
“I will be taking administrative action where I can,” Calabria said, speaking Monday at the same event. “And I will be consulting with Congress, the administration and other regulators wherever necessary.”
Duffy said administrative action by the FHFA could ultimately spur Congress to act.
“I would just say that I love Mark Calabria, but if the Congress doesn’t act, Mark Calabria is going to start doing things as well, which might galvanize industries that have not been inclined in the past to say, ‘Well maybe we should do this through the Congress,’” he said.
Duffy suggested that the mortgage market would be better off if Congress were to lead the way on reform instead of the Trump administration.
“I think the industry likes when they have enough say in the process, and with us they’d have more say,” he said.
Meanwhile, Clay said he would not tolerate any weakening of the Fair Housing Act in the process of enacting reform, and would also like to see the Home Mortgage Disclosure Act protected.
“We need HMDA data in order to determine what the trends are in housing finance, so that would be the conversation I would have,” he said.