The Senate Banking Committee held a confirmation hearing on February 14 with President Trump’s nominee to serve as director of the Federal Housing Finance Agency (FHFA), Dr. Mark Calabria.
Hours before the hearing, NLIHC President and CEO Diane Yentel and Local Initiatives Support Corporation (LISC) President and CEO Maurice Jones published an op-ed in Affordable Housing Finance warning that the national Housing Trust Fund and Capital Magnet Fund – both of which are funded through a small assessment on Fannie Mae or Freddie Mac (government-sponsored entities or GSEs) – could be at risk under FHFA Acting Director Joseph Otting.
Democratic members of the Committee asked Dr. Calabria several questions about his past statements and writings on the cause of the financial crisis, his commitment to access and affordability, and the Trump administration’s plans to reform Fannie Mae and Freddie Mac, which the FHFA regulates.
In discussions with Senator Chris Van Hollen (D-MD) and Jack Reed (D-RI), Dr. Calabria committed to continuing funding for the national Housing Trust Fund and Capital Magnet Fund as required by law. When asked if he would commit to continue funding for the Housing Trust Fund and the Capital Magnet Fund, Dr. Calabria said, “within the confines of the statute, absolutely yes.” When pressed by Senator Reed for more specificity, Dr. Calabria said that funding for the national Housing Trust Fund and Capital Magnet Fund would be suspended “only if the [GSEs] are essentially failing, and my primary responsibility, if confirmed as FHFA director, is to make sure that doesn’t happen.” He also stated that he had not seen any public information that would suggest that Fannie Mae and Freddie Mac were financially unstable.
When asked by Ranking Member Sherrod Brown (D-OH) about past support for eliminating the affordable housing goals at Fannie Mae and Freddie Mac, Dr. Calabria said he believes there is a balance between funding affordable housing goals and protecting taxpayers by having a robust capital buffer. He said he could “absolutely commit to keep them in place as long as the existing regulatory structure remains.” In response to a question by Senator Mark Warner (D-VA) about whether the FHFA director can unilaterally increase capital reserves, a move which could make homeownership loans unaffordable to many potential homebuyers, Calabria stated that the current Preferred Stock Purchase Agreement prevented such unilateral actions.
Senator Elizabeth Warren (D-MA) focused her questions on the role of the FHFA, through its affordable housing goals, in redressing the federal government’s long-established history of housing discrimination. Dr. Calabria committed to preserving strong affordable housing goals, but “in a sustainable way.” When Senator Tina Smith (D-MN) asked about the GSEs’ “Duty-to-Serve” requirements, which help facilitate affordable homes in rural and tribal areas, Dr. Calabria committed to continuing these efforts, but “not at the expense of the agencies’ safety and soundness”. He also spoke in favor of collecting data to track the effectiveness of these requirements.
Read the joint NLIHC and LISC op-ed at: https://bit.ly/2SM1y4f
Read Dr. Calabria’s testimony at: https://bit.ly/2TQXUTX