Republican Platform Calls for Housing, Anti-Poverty, and Consumer Protection Reforms

I Voted!  Housing and the ElectionOn the first day of the Republican National Convention (RNC) in Cleveland, July 18, the party formally adopted its 2016 platform, including several proposals impacting federal housing policy. The platform criticizes President Obama’s response to the financial crisis for overlooking what they argue was the true cause of the crisis - federal housing policies. To restore economic growth and strengthen the housing market, the platform calls for scaling back the federal government’s role in housing finance, reforming anti-poverty programs, limiting fair housing and fair lending regulations, and abolishing the Consumer Financial Protection Bureau (CFPB).

Housing Finance Reform

The Republican platform calls for the federal government to scale back its involvement in the housing finance system, including Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA).

The platform states that the next Administration should “reconsider the utility” of the government-sponsored entities (GSEs) Fannie Mae and Freddie Mac, alleging that their current business model is corrupt because taxpayers are liable for losses while shareholders and executives benefit from profits. The platform calls for reforming the FHA so that it no longer guarantees mortgages for higher-income households. 

The platform states that the Republican party “will end the government mandates that required Fannie Mae, Freddie Mac, and federally insured banks to satisfy lending quotas to specific groups,” contending that agencies’ affordable housing goals amount to discrimination.

Anti-Poverty Measures

Like the House Republican’s anti-poverty plan that was released in June, the party platform focuses on what Republicans see as the failures of the War on Poverty. Both proposals claim that instead of lifting families out of poverty, federal programs actually keep families dependent on the government. At the heart of both proposals is the idea that the War on Poverty has failed and wasted billions of dollars.

Both proposals hold up the 1994 welfare reform legislation as a model for future federal assistance. The platform emphasizes the need for “the dynamic compassion of work requirements,” arguing that “opportunity” should replace “handouts.”

Fair Housing and Fair Lending

The platform criticizes federal fair housing and fair lending laws. It argues that HUD’s Affirmatively Furthering Fair Housing (AFFH) regulations amount to “social engineering,” and has “nothing to do with proven or alleged discrimination and everything to do with hostility to the self-government of citizens.”

The Republican platform also states that the party will “end the government’s use of disparate impact theory in enforcing anti-discrimination laws with regard to lending,” without providing further explanation.

Consumer Financial Protection Bureau (CFPB)

The Republican platform calls for the CFPB to be abolished. If Republicans are unable to eliminate the agency, the platform calls for the CFPB to be funded through the Congressional appropriations process. The agency’s funding was designed to be insulated from politics and is currently funded from the Federal Reserve.

The platform criticizes CFPB’s role in directing settlement funds to third-party organizations. It argues that, beyond making consumers whole, settlement funds should go directly to the Treasury and the diversion of settlement funds to third parties should be a criminal offense.      

Democrats will vote this week on their party platform at the Democratic National Convention in Philadelphia.

See the Republican platform: