FHFA Acting Director Begins Confirmation Process to Become Director
Written By: Joel Palmer, Op-Ed Writer
Sandra L. Thompson, the acting director of the Federal Housing Finance Agency, appeared before the Senate Committee on Banking, Housing, and Urban Affairs last week in anticipation of taking over the agency for a five-year term.
Thompson was nominated for the permanent role by President Joe Biden in December after taking over as acting director last June. The President named her interim director after dismissing Mark Calabria, an appointee of President Donald Trump, after the Supreme Court ruled that the agency's director could be removed by a sitting president without cause.
Prior to serving as acting director, Thompson spent eight years as deputy director of FHFA. She also spent 18 years with the Federal Deposit Insurance Corporation.
FHFA will continue to promote sustainable and equitable access to credit in a safe and sound manner,” Thompson said in her opening remarks. “We will responsibly focus our efforts on the safety and soundness mission Congress gave to FHFA and on the mission that Congress gave the housing GSEs under our supervision.”
Sen. Sherrod Brown (D-OH), chairman of the committee, noted during his opening remarks that Thompson has already made an impact as FHFA acting director. Earlier this month, the agency directed Fannie Mae and Freddie Mac to revise their previously submitted Duty to Serve plans. The agency said that neither enterprise’s plans, which were published in May, meet the standard for any of the three underserved markets targeted by the Duty to Serve Program.
Another move Thompson made was to eliminate the Adverse Market Refinance Fee. The 50-basis point fee was charged to lenders to cover projected losses as a result of the COVID-19 pandemic.
FHFA also established higher low-income housing goals for Fannie Mae and Freddie Mac, expanded eligibility for its refinance programs, and issued a proposed rule to require the GSEs to develop, maintain, and submit annual capital plans.
“I can think of no other nominee as qualified to work to make homes more available and affordable for families throughout the country while strengthening the financial standing of the GSEs,” Brown said.
The committee’s Ranking Member, Pat Toomey (R-PA), expressed a different opinion on Thompson’s nomination during his opening statement.
“She has proposed reductions in capital requirements for Fannie Mae and Freddie Mac, suspended restrictions on the GSEs’ acquisitions of high-risk loans, required the GSEs to develop plans to further what Democrats call ‘racial equity,’ but what is really just affirmative action in the housing space, and increased the GSEs’ affordable housing goals. Unfortunately, she hasn’t prioritized ending the GSEs’ conservatorships,” said Toomey.
He added: “This policy contemplates more mortgages for higher risk borrowers, re-purposing the GSE as instrumentalities of social policy, and a disappointing embrace of the failed GSE model.”
When asked during the hearing about GSE conservatorship, Thompson said the agency would “defer to Congress.”
Thompson’s confirmation is not expected to receive much opposition when the vote comes before the full Senate. Brown noted in his opening remarks that she has the support of two dozen consumer advocates, civil rights organizations, and housing advocates. That includes the National Association of Realtors, which submitted a letter of support last week.
“Since being appointed in June of 2021, based on her strong qualifications, Acting Director Thompson has ensured the government-sponsored enterprises (GSEs) are well capitalized while balancing the need to expand low-cost mortgage credit to communities across this country.”
About the Author
As an NAMU® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
