After first delaying action on his
nomination for months and then rejecting it in October the Senate finally
confirmed Mel Watt as the new director of the Federal Housing Finance Agency
(FHFA). The vote, 57 to 41, came late
Tuesday and was the second Obama nomination ratified under new Senate rules
which effectively ended the Republican's ability to filibuster executive and
judicial presidential appointments.
Watt, an 11-term sitting congressman
from North Carolina, will replace Edward J. DeMarco who has been acting
director of FHFA almost from the beginning of President Obama's first term and
someone the administration has long hoped to remove from that position. An earlier nomination of another North
Carolinian, its banking commissioner Joseph Smith, was also blocked by Senate
Watt will take charge of the agency,
which acts as regulator of the 12 Federal Home Loan Banks and as regulator and
conservator of Freddie Mac and Fannie Mae (the GSEs) at a time when the future
of the GSEs is in doubt. DeMarco has
already taken steps that will affect their structure in the future including
the establishment of a jointly owned company that will oversee construction of
a new secondary market platform, raising fees for the GSEs' government-backed
guarantee, and putting in place a risk sharing structure.
Housing and Urban Development Secretary Shaun Donovan said that Watt's
confirmation represents an important step in the housing market's
recovery. Watt, he said, has a proven
public and private sector track record of "protecting consumers, fighting
abuses, championing economic growth, and working across the aisle on important
issues that benefit the common good."
E.J. Burke, Chairman of the Mortgage Bankers Association (MBA), issued
MBA's formal statement on the confirmation, saying, "MBA looks forward to working with Director Watt
on developing and implementing ideas to improve the function of the secondary
mortgage market. Fannie Mae and Freddie Mac have been in conservatorship
for more than five years, and it's well past time to move forward on reform.
As Director of FHFA, Congressman Watt will have a historic opportunity to
shape the secondary mortgage market and the government's role in housing.
Another early comment on the
confirmation came from Financial Services Committee Chairman Jeb Hensarling
(R-TX) who said of his fellow committee member that he has been thoughtful and
well-respected during his tenure but that he has big shoes to fill in replacing
Demarco. Hensarling said he challenged
Watt to carry on DeMarco's policies.
At the time of the Senate vote Watt
was in South Africa attending the state ceremony for Nelson Mandela.