Watt: No White House consultations before policy speech

Federal Housing Finance Agency (FHFA) Director Mel Watt said in an interview on Sunday that he did not consult with the White House before a major policy speech last week that marked a change of course for how the regulatory agency would oversee mortgage giants Fannie Mae and Freddie Mac.

“None,” Watt, a former Democratic congressman from North Carolina, said on C-SPAN’s “Newsmakers.”

“A regulator doesn’t report to the White House, so I didn’t think that I had any responsibility to have a discussion with the White House or anybody from the administration,” Watt said. “We were doing what we were told to do by statute, and we’re doing it. That doesn’t mean we’re operating in a vacuum.”

Watt said last week in a Washington speech that he was directing Fannie and Freddie officials to expand access to home loans, a departure from his predecessor Edward DeMarco, who looked to shrink Fannie and Freddie’s footprint in the market.

Lawmakers on both sides of the aisle have indicated they want to wind down Fannie and Freddie, which have been under a government conservatorship after they required a taxpayer bailout following the 2008 economic collapse.

Fannie and Freddie have reported profits and have paid back their more than $116 billion taxpayer bailout.

The Senate Banking Committee approved legislation on a 13-9 vote last week that would end Fannie and Freddie and create a new entity to reform the housing finance industry. But the bill faces little chance of making it to the Senate floor because of the close committee vote tally.

“I haven’t reviewed the bill,” Watt said, adding that his staffers have to provide “technical” support to the committee.

Watt reiterated that he’s not opposed to ending Fannie and Freddie, but it’s up to Congress to pull the trigger.

“I don’t think it’s our role necessarily to shrink the footprint of Fannie and Freddie,” Watt said on C-SPAN, where he was interviewed by The Wall Street Journal‘s Nick Timiraos and Bloomberg’s Clea Benson. “I never think of it in terms of how we are going to end this.”

“It’s not that I’m opposed to it, and we will certainly allow it to happen to the extent that the private sector is ready to step into the space,” he added.