The White House and congressional GOP leaders are eyeing a tight window between tax reform passage and the 2018 midterms to pass housing finance reform. And with key policymakers readying their exit, the effort could be the most concerted push yet.
Democrats' victories in Virginia and New Jersey fueled speculation that they may be able retake the House during midterm elections next year. That could have a big impact on regulatory relief, housing finance reform and other priorities for banks and credit unions.
Mark Calabria, the chief economic adviser to Vice President Mike Pence, said the administration is focused for now on more pressing issues than GSE reform, including addressing housing damage from recent hurricanes.
In a somewhat surprising decision, House Financial Services Committee Chairman Jeb Hensarling announced his retirement from Congress on Tuesday, but speculation immediately grew that he could fill a regulatory post.
Federal Housing Finance Agency Director Mel Watt said the agency is poised to examine alternatives to how a Fannie Mae and Freddie Mac assess creditworthiness of home buyers, including seeking public comment on the issue later this fall.
Though FHFA Director Mel Watt stopped short of saying he would break with a Treasury agreement that forces all profits of the GSEs to go to the government, he emphasized that it couldn’t continue indefinitely.
Sen. Bob Corker has been a key voice in the housing finance reform debate. His departure at the end of next year puts a deadline of sorts on his efforts to unwind and replace Fannie Mae and Freddie Mac.
Efforts to persuade regulators to allow Fannie Mae and Freddie Mac to use alternative credit scores would stifle competition between the credit bureaus and FICO and do little to expand access to credit, according to industry analyst Chris Whalen.
The need to raise the U.S. debt limit, pass a budget, provide relief for victims of Hurricane Harvey and enact flood insurance and tax reform will dominate the remaining legislative calendar this fall.