May 09, 2013
LAWT Staff and Wire Report
President Barack Obama nominated veteran Rep. Melvin Watt to head the Federal Housing Finance Agency, the government regulator that oversees lending giants Fannie Mae and Freddie Mac. He also has chosen a former telecommunications lobbyist to head the Federal Communications Commission, the White House said.
Watt, a North Carolina Democrat who has been in Congress for 20 years, would replace Edward DeMarco, an appointee of Republican President George W. Bush, who has been a target of housing advocates, liberal groups and Democratic lawmakers.
Obama also has settled on Tom Wheeler, one of his top campaign fundraisers, to become the country's top telecommunications regulator. The president is expected to name FCC Commissioner Mignon Clyburn to serve as acting chairwoman.
Senate confirmation is required for both posts.
“I commend President Obama on his nomination of Congressman Melvin 'Mel' Watt as director of the FHFA,” said Attorney General Kamala D. Harris on May 1 after the nomination.
“As Californians work to recover from the mortgage crisis, they need a strong director at FHFA who will be an advocate for homeowners and champion their rights. My number one priority has always been the welfare of Californians, and I am confident that Congressman Watt will advance policies that serve the best interest of working families in California and across the country. I look forward to working with him.”
Watt's nomination comes at a crucial time for Fannie Mae and Freddie Mac, two government-controlled mortgage-finance enterprises. The government rescued the companies at the height of the financial crisis in September 2008 as they teetered near collapse from losses on mortgage loans gone bad.
Taxpayers have spent about $170 billion to rescue the companies. So far, they have repaid $55.2 billion.
Fannie and Freddie together own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans. Those loans are worth more than $5 trillion. Along with other federal agencies, they back roughly 90 percent of new mortgages.
The nomination comes as the housing industry is making a comeback. Home prices are up, foreclosures are down and housing construction is on the rise. Moreover, Fannie Mae had its biggest yearly profit last year, earning $17.2 billion.
Watt, a senior member of the House Financial Services Committee and former chairman of the Congressional Black Caucus, played an influential role in the passage of a financial regulatory overhaul in 2010. That legislation, however, did not address the fate of the major mortgage lenders, an issue likely to come up during Obama’s second term.
His colleague Congresswoman Maxine Waters described Watt as “thoughtful, well informed, principled and fair.”
“I have worked very closely with Representative Watt for almost 20 years,” Waters said in a statement, also released May 1 after the nomination.
“We have served together on the House Financial Services Committee since 1994, where Mel is highly respected by colleagues on both sides of the aisle as a consummate legislator with the vision to see what Congress can do to help make people’s lives better and the determination to move a good bill through the legislative process. Representative Watt is always respectful of opposing viewpoints and can often find common ground when others can find none. He is accepting, open-minded and collaborative – and he gets things done.”
Watt represents the Charlotte area, home base of behemoth Bank of America Corp. He becomes yet another high-profile African-American and the second North Carolinian nominated by Obama in three days to a top government post. On Monday, Obama nominated Anthony Foxx, mayor of Charlotte, to head the Transportation Department.
Watt, who has a consistently liberal voting record, is expected to face Republican opposition to his confirmation and Sen. Bob Corker, R-Tenn., was among the first to express disappointment.
The White House was already lining up supporters who might hold some sway with GOP senators.
“This gives new meaning to the adage that the fox is guarding the hen house,” Corker, a member of the Senate Banking, Housing and Urban Affairs Committee, said in a written statement. “The debate around his nomination will illuminate for all Americans why Fannie and Freddie failed so miserably.”