Today, the U.S. Supreme Court held that a 2008 law prohibiting the president from replacing the director of the Federal Housing Finance Agency (FHFA) is unconstitutional. FHFA is the conservator and primary regulator for Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs).
Following news of the U.S. Supreme Court’s decision, the Biden administration is expected to nominate a new director to replace FHFA Director Mark Calabria, an appointee of the Trump administration.
Jesse Van Tol, CEO of the National Community Reinvestment Coalition (NCRC), made the following statement:
“This is a pivotal moment for Fannie Mae and Freddie Mac, for the mission in their charters, and the role they can and must play in facilitating access to affordable housing and affordable mortgage credit for low- and moderate-income (LMI) households, for families and communities of color and rural communities. The scale of the affordable housing challenges facing the nation both in terms of the supply of new and existing affordable housing and access to affordable and sustainable mortgage credit cannot be met without strong leadership from the GSEs.
“The next director of FHFA must embrace the administration’s overall commitment to racial equity, and among other steps, stake out a regulatory framework that supports a robust role for the GSEs in helping to close the Black-White homeownership divide sustainably. In addition to their loan purchases from lenders in the primary mortgage market, the GSEs must provide far more market leadership by developing loan products, making investments and conducting outreach targeted at borrowers and communities of color as well as lower-income and rural communities.
“The administration and the next director must also act immediately to revisit a number of recent policies that undermine the role of the GSEs in the market, mortgage rates and mortgage products, including the December rule around their capital requirements and the program and product restrictions included in the January amendments to the FHFA-Treasury Preferred Stock Purchase Agreements (PSPAs).”
