FHFA = UST/Mnuchin = Administration = Corker-Warner/Crapo-Brown
From Joe Light:
Craig Phillips at an event today said Treasury still wants Congress to take the lead on housing finance reform and that Mnuchin had met recent with Sens. Corker and Warner and expressed support for their effort to develop legislation
Asked if Trump would act without Congress if legislation was stalled in August, Phillips said "We don't have some deadline or any kind of expectation. August is obviously very soon" and told an anecdote of another piece of legislation that took three years
He said Mnuchin is committed to ending the conservatorships during this administration
On Watt's proposal released yesterday, he said he agreed with its broad objectives and the question was how to get there. He said he agreed with FHFA that the GSEs' governance structure (with FHFA in control but UST on the hook) didn't make sense
He said Mnuchin: the conservatorship needs to end, thinks reform needs to address other housing agencies rather than just Fannie/Freddie, and wants to level the playing field between the public sector and private sector
He said Mnuchin supports the effort to develop a single Fannie-Freddie security. He said they want more competition but think the number of GSEs is less important than having a strong regulator
He said even if you have several GSEs, during a housing crash, they could all go down at once (but said competition is still good for innovation and not over-reliance on any one company). Said regulation and strong capital requirements are more important
On agreement with Watt, Phillips talked about GSEs' governance model in which the boards are reportable only to FHFA
Phillips: "There actually aren't shareholders so there's no longer a fiduciary relationship between stakeholders in the traditional way. We sort of see ourselves as the stakeholder at the Treasury" but not represented by the board and employees because of the shares' nature
WAKE UP EVERYONE... WHEN JOE LIGHT REPORTED ON 12/6 THAT COMMON WOULD BE WIPED OUT AND PREFERRED MADE WHOLE OR CLOSE TO IT... YOU SHOULD HAVE LISTENED. LAST CHANCE. SAVE YOURSELVES.
