FHFA's Otting gives Democratic leaders little detail on GSE plans

WASHINGTON — Acting Federal Housing Finance Director Joseph Otting said he welcomes congressional Democrats' “insight and perspective” on how to end the conservatorships of Fannie Mae and Freddie Mac, but offered little detail on his approach to dealing with the government-sponsored enterprises.

Last week, House Financial Services Committee Chairwoman Maxine Waters, D-Calif., and Senate Banking Committee ranking member Sen. Sherrod Brown, D-Ohio, sought more details following reports that Otting and the Trump administration may release the GSEs from conservatorship without congressional involvement.

In his response, Otting only listed his statutory duties as head of the agency, including prudential oversight of the two mortgage giants and management of their "ongoing conservatorships."

Andrew Harrer/Bloomberg

“As the Presidentially-designated Acting FHFA Director, I intend to carry out these duties and responsibilities and lead the agency in accomplishing its mission,” Otting wrote in the letter to Waters and Brown, obtained by American Banker. “As you are aware, my duties began January 7th, and as we begin the journey of evaluating the Enterprises and developing a framework for ending conservatorship, I would welcome your insight and perspective.”

Politico reported last week that Otting said at an agency meeting this month that the Trump administration is planning an announcement within weeks that could "set a direction for what the future of housing will be in the U.S. and what the FHFA’s part of that will be.”

The comments prompted speculation that the agency would use its administrative authority to end the conservatorships without Congress passing a GSE reform package. But in published reports earlier this week, a White House spokeswoman said the administration plans to work with Congress on a plan.

Otting, who is running the agency on an interim basis while also serving as comptroller of the currency, told Waters and Brown that the agency’s mission is to “ensure that the regulated entities operate in a safe and sound manner so that they serve as a reliable source of liquidity and funding for housing finance and community investment.”

It is unclear how long Otting will serve at the FHFA. President Trump nominated Vice President Mike Pence’s chief economist, Mark Calabria, to be the next permanent director of the FHFA.