The White House announced this morning it plans to nominate 11-term Democratic Rep. Melvin Watt, a strong credit union supporter, to head the Federal Housing Finance Agency, which regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.
If confirmed by the Senate for the FHFA post, Watt, of North Carolina, a 20-year veteran of the House, would replace Edward DeMarco, an appointee of President George W. Bush who has been a target of housing advocates, liberal groups and Democratic lawmakers calling for his ouster.
Watt, who co-sponsored 2007 legislation creating the single Fannie and Freddie regulator, has been a leading credit union advocate in Congress, often speaking out on behalf of credit union bills. In 2012 he criticized NCUA for retaliating against North Carolina regulators for allowing State Employees’ CU to publicly disclose its CAMEL rating. In 2007 he traded places for a day with a teller at Charlotte Metro CU to demonstrate his support for credit unions. He has also supported credit unions on regulatory relief and the Durbin amendment on debit fees.
Watt's nomination comes as the debate is heating up again over the future of Fannie and Freddie, the two government sponsored enterprises taken under federal conservatorship in September 2008 which have recently returned to profitability. The two companies are critical to the secondary mortgage market and to credit unions, as they buy more than half of all single family mortgages originated by credit unions and banks, then sell them back to many of the same institutions as packed mortgage-backed securities.
Watt, a senior member of the House Financial Services Committee and former chairman of the Congressional Black Caucus, played an influential role in the passage of a financial regulatory overhaul in 2010.
NOTE: League Senior Vice President David Miles and Director of Governmental Affairs Karin Sherbin met with banking and economics aides for Sen. Mark Warner when they visited Richmond on Tuesday. In that discussion, the Warner aides vowed to seek the input of credit unions on the issue of reforming Fannie Mae and Freddie Mac.