The Senate Banking Committee will delay a vote on its highly anticipated legislation to overhaul the housing finance market, a Senate aide confirmed Tuesday morning, just hours before the markup was scheduled to begin.
The panel will still meet on Tuesday, voting on several nominees to the Federal Reserve Board and other agencies, but will only hear opening statements from Senate Banking Committee Chairman Tim Johnson and Sen. Mike Crapo, the panel's top Republican, about the housing finance bill. The panel will then recess for an undetermined amount of time.
"In response to requests from some of the members of the committee, the chairman and ranking Member have agreed to start the markup of S. 1217 tomorrow (following votes on nominees as previously discussed), limit opening statements to just Chairman and Ranking Member, and then recess the markup until a date/time TBA," a committee staffer wrote to Banking Committee members just after midnight on Tuesday, in an email obtained by American Banker. "Other than the votes on nominees, no other votes are expected to take place tomorrow during the executive session."
The email adds: "Thank you everyone for all your hard work so far. While we already have the votes to pass S. 1217, we look forward to working together in the coming days to explore ways to broaden the bipartisan support."
The delay in an actual vote was another twist in the ongoing effort to unwind Fannie Mae and Freddie Mac. Johnson and Crapo introduced a bipartisan bill last month to establish a new secondary market backed by an explicit government guarantee, a measure that built on earlier legislation already supported by eight panel members.
The legislation likely already has the requisite support to get passed out of the committee, but reports in recent weeks have suggested difficulty bringing more lawmakers on board on either side of the political aisle. Rumors that Johnson and Crapo would have to delay the hearing to have further time to negotiate began swirling several weeks ago, as reported by American Banker.
Analysts had earlier predicted that a short-term delay would not necessarily hurt the push for housing finance reform, if it resulted in additional votes from committee members. It remains unclear, however, whether Johnson and Crapo can garner those additional votes.
"This type of delay is not unexpected as staff has been working to tweak the bill all weekend to pick up support," said Jaret Seiberg, an analyst at Guggenheim Securities, who first reported the delay in a note Tuesday morning. "Still, this does make us more concerned about whether the measure can quickly garner the 16 votes needed to ensure consideration by the full Senate with enough time left in 2014 to work out a compromise with the House. As a result, our bias is rising that we will lower our 40% odds that housing finance reform can get enacted in 2014."