Lawmakers want to hear more from comptroller on plans for GSE reform

The comptroller of the currency, currently serving also as acting director of the Federal Housing Finance Agency (FHFA), faced questions Friday from the Democratic leaders of Senate and House committees overseeing his agency about his reported comments concerning reform of the government-sponsored enterprises (GSEs) in housing finance.

Senate Banking Committee Ranking Member Sherrod Brown (D-Ohio) and House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) called on Comptroller Joseph Otting (who is also serving as acting director of FHFA) to “explain his recent comments regarding his plans for the agency and the GSEs, Fannie Mae and Freddie Mac.”

Otting was quoted in Politico Thursday as telling staff at FHFA that he and the White House would soon “announce a plan to move Fannie Mae and Freddie Mac out of conservatorship.” Brown and Waters called on Otting to explain.

Formally known as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), the organizations both purchase and securitize mortgages into mortgage-backed securities (MBS). FHFA serves as the federal regulator of these two organizations as well as the Federal Home Loan Bank (FHLB) system. Since 2008, FHFA has also served as conservator of Fannie Mae and Freddie Mac.

“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,” the lawmakers wrote. “Additionally, your comments call into question the independence of the FHFA under your leadership.”

Otting is serving dual roles at OCC and FHFA; he was appointed acting director of the GSE regulator in December, and assumed the job earlier this month.

The two lawmakers also referred to other remarks earlier this month attributed to Otting in which he reportedly said that FHFA may pursue new policies under his leadership. “In an interview on January 10, 2019, you stated that there was ‘a clear mission that’s outlined by the Treasury and the White House, what they want to accomplish’ at FHFA and indicated that you would pursue that mission in your new role.”

Brown and Waters, in their letter, called on Otting to provide their committees with a copy or detailed description “of the mission that Treasury and the White House have outlined to which you referred no later than Feb. 1.”

Letter to Comptroller Joseph Otting from Sen. Sherrod Brown (D-Ohio) and Rep. Maxine Waters (D-Calif.)