Rep. Mel Watt, D-N.C., overcame a difficult challenge to becoming the next head of the Federal Housing Finance Agency on Thursday when he was approved by the Senate Committee on Banking, Housing and Urban Affairs in a 12-10 vote that was split along party lines.
Watt’s nomination faced considerable criticism from Republicans on the committee who questioned the placement of a politician at the head of the FHFA. Republicans have been pleased with the work of current acting director, Ed DeMarco, who has led the agency since 2009.
Sen. Mike Crapo, R-Idaho, said any director, who would be directly in charge of mortgage giants Fannie Mae and Freddie Mac, needs to be both unbiased and possess an in-depth knowledge of the housing finance industry.
“Because the conservator has virtually unchecked power to control two multitrillion dollar companies (Fannie and Freddie) and, through them, our entire mortgage market, the conservator must be an apolitical financial regulator with technical expertise and someone who will resist political pressure from all sides of the political spectrum,” Crapo said.
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Watt practiced law for more than 20 years, specializing in minority business and economic development law, and has served in Congress for the past 20 years.
However, chairman of the banking committee, Sen. Tim Johnson, D-S.D., defended Watt’s experience, saying it’s the kind of in-depth expertise needed to lead the agency.
“Congressman Watt has over 40 years of experience in housing, real estate and other financial service issues as an attorney and member of the House Financial Services committee. In his 20-plus years practicing law, he has personally walked hundreds of families through real estate closings. This is the kind of in-depth expertise we need leading the FHFA,” Johnson said.
With the vote on Watt’s nomination, a hurdle has been cleared, but Watt’s confirmation before the full Senate may see delays. Although he only needs to be approved by a majority of the Democrat-controlled Senate, strong opposition from the Republicans may cause difficulties in getting the 60 votes required to invoke cloture on his confirmation. Cloture, a procedural move, would end debate on Watt’s nomination and begin proceedings for a vote to take place.
Despite the partisan criticism, colleagues from both sides of the aisle representing Watt’s home state expressed their support when his nomination was first announced this spring.
“Having served with Mel, I know of his commitment to sustainable federal housing programs and am confident he will work hard to protect taxpayers from future exposure to Fannie Mae and Freddie Mac. I look forward to working with Rep. Watt in his new role to find new ways to facilitate more private sector involvement in the housing and mortgage markets,” Sen. Richard Burr, R-N.C., said at the time.
“Congressman Mel Watt is an outstanding choice to lead the Federal Housing Finance Agency. Throughout his career Mel has been a champion for affordable housing in North Carolina and across the country, and has worked tirelessly to protect families from predatory and deceptive lending practices,” Sen. Kay Hagan, D-N.C., said in May.