Fannie Mae-No Politics (FNMA)

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Maxine Waters calls into question FHFA independence after MarketWatch reports Fannie, Freddie conservatorship plan

Published: Jan 25, 2019 3:29 p.m. ET By STEVE GOLDSTEIN D.C. BUREAU CHIEF

Bloomberg


Rep. Maxine Waters, a Democrat from California and chairwoman of the House Financial Services Committee

The head of the House Financial Services Committee and the top Democrat on the Senate Banking Committee are raising questions about the independence of Fannie Mae’s and Freddie Mac’s regulator after a MarketWatch report.

Rep. Maxine Waters, a California Democrat, and Sen. Sherrod Brown, an Ohio Democrat, asked Federal Housing Finance Agency Acting Director Joseph Otting to explain his stance after MarketWatch exclusively reported on his comments at an internal meeting about the White House preparing a plan to end the government-sponsored enterprises conservatorship.

“To date, we have not seen a comprehensive statement from the White House and Treasury Department under the Trump administration providing their views on regulation of the housing finance system. Additionally, your comments call into question the independence of the FHFA under your leadership,” Waters and Brown wrote.

The lawmakers said they wanted “copy or detailed description of the mission that Treasury and the White House have outlined” by Feb. 1.

Audio subsequently obtained by MarketWatch and also reported by Politico, indicated that a critical question in the White House plan is how to get somewhere between $150 billion to $200 billion worth of capital for Fannie Mae FNMA, +3.37% and Freddie Mac FMCC, +3.53% .

Otting also said that the nominee to lead the FHFA, Mark Calabria, has “signed off” on the plan to get the mortgage-liquidity providers out of conservatorship.

Over-the-counter shares of the two companies have tripled this year on hopes for the White House plan.

One quirk Otting told his agency — he believes he’ll have two seats on the Financial Stability Oversight Council since he also leads the Office of the Comptroller of the Currency. “I will have to stand up and run around the table,” he said.