Senate rule change bolsters Watt’s chances to become top housing regulator

A Senate rule change should pave the way for Rep. Mel Watt to take over as one of the nation’s top housing regulators. 

The North Carolina Democrat’s chances to lead the Federal Housing Finance Agency (FHFA) were bolstered on Thursday when the Senate voted to prevent the minority party from filibustering nominations, except those to the Supreme Court. 

Watt, who lost his first bid to win Senate confirmation last month, would probably get another vote the week of Dec. 9, in what is expected to be the final week of work for Congress before lawmakers leave for the holidays.

He garnered 56 votes on the motion to end debate on his nomination on Oct. 31. Senate Majority Leader Harry Reid (D-Nev.) supports Watt but changed his vote to ‘no’ to reserve the right to call Watt’s nomination back up. 

Following the vote — two Republicans joined Democrats — the White House and Watt vowed to stay in the game and give the nomination another shot.

National Economic Council Director Gene Sperling urged the Senate to confirm Watt, a 20-year member of the House who would be charged with guiding the FHFA through a major overhaul of Fannie Mae and Freddie Mac as well as the broader housing finance system.

“A confirmed director will have a stronger mandate to focus on the broad range of FHFA’s statutory duties, and not just conservation of assets,” Sperling said at a housing finance summit with the Urban Institute and CoreLogic on Wednesday. 

“Moreover, a permanent director will have the mandate to facilitate a smooth and orderly transition as part of housing finance reform,” he said. 

Watt has been a member of the House Financial Services Committee for nearly 20 years and drafted parts of the Dodd-Frank financial reform law. 

Housing industry leaders have backed Watt for the position and argued that it is imperative that the FHFA put a permanent director in place to implement any legislation passed by Congress. 

Sperling also argued that a confirmed director “will provide industry greater policy certainty which could increase their willingness to invest for the future.”

He touted Watt’s public- and private-sector credentials, arguing that he still has “not heard one good reason why he should not get an up or down vote.”

Senate Republicans have argued that Watt’s nomination is too political and that he lacks the experience needed to run the agency, calling instead for installing a technocrat. 

But housing industry experts say the GOP missed their chance to approve a technocrat in Joseph Smith, then the top banking regulator in North Carolina, who now is in charge of overseeing a $25 billion settlement with banks over shoddy foreclosure practices. 

They have said it is clear that Republicans prefer acting director Edward DeMarco, who has bucked the Obama administration on issues, such as principle reduction on mortgages. 

Conservative groups, such as FreedomWorks and Heritage Action, have come out in opposition to Watt’s nomination.

“It is virtually unprecedented for a sitting member of Congress to be rejected by the U.S. Senate,” Rep. Maxine Waters (D-Calif.) said in after the October vote.