Crapo Puts Housing Finance Reform Front & Center

Housing Finance reform will be a key focus area for the Senate Banking Committee during the 116th Congress. In an outline for the committee's agenda, Banking Committee Chairman Sen. Mike Crapo said that the committee would "continue to identify and move bipartisan legislative solutions" during this session.

Calling housing finance reform the "last piece of unaddressed business from the financial crisis," Crapo said that the committee would assess the proposals it has received from various groups on the conservatorship of Fannie Mae and Freddie Mac since it favorably reported on the bipartisan housing finance reform legislation in 2014.

"The Committee will assess these and other proposals to determine how we can fix the flawed system, establish appropriate levels of taxpayer protection, preserve the 30-year fixed-rate mortgage, increase competition among mortgage guarantors and promote access to affordable housing," Crapo said.

Housing finance reforms have been in the spotlight ever since Joseph Otting, Acting Director of the Federal Housing Finance Agency (FHFA), that oversees the conservatorship of the GSEs, remarked that the White House would be announcing a plan by next month to end government control of Fannie Mae and Freddie Mac.

According to a recording of his remarks obtained by Politico, Otting told FHFA employees that they would be seeing communication from the White House and the Treasury over the next two to four weeks that "really sets a direction for what the future of housing will be in the U.S. and what the FHFA's part will be."

The remarks have set the share prices of both the government-sponsored enterprises (GSEs) soaring as investors became more hopeful that Fannie and Freddie could soon be out of government conservatorship.

Apart from housing finance reform, the Senate Banking Committee also plans to focus on ensuring that federal agencies implement the Dodd-Frank Reforms Act also known as the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA). The provisions under this Act include provisions to enhance the U.S. Department of Housing and Urban Development's (HUD's) Family Self-Sufficiency program and streamline compliance burdens on smaller Public Housing Authorities.

"The Committee will work to identify additional opportunities to improve the efficiency and effectiveness of HUD programs, and will consider updates to Title VI of the Violence Against Women Act," Crapo said.

Additionally, he said that the committee would continue to explore targeted reforms, such as making it easier for consumers to interface with credit bureaus generally and dispute inaccuracies. The committee also plans to reassess the National Flood Insurance Program that has been extended 10 times since last Congress with the latest re-authorization set to expire on May 31.