Announcements
Jennifer Emerling / There Is More Work To Be Done
Jennifer Emerling / There Is More Work To Be Done
House and Senate Committees Release Plans for 113th Congress
The chairmen of the House and Senate committees that oversee federal housing programs, including HUD and USDA RHS, have released their agendas for the 113th Congress (calendar years 2013 and 2014). The plan proposed by House Financial Services Committee Chairman Rep. Jeb Hensarling (R-TX) is longer and more detailed than the document issued by Sen. Tim Johnson (D-SD), Chairman of the Senate Banking, Housing, and Urban Affairs Committee. HAC has prepared the table below to compare what the two committees say on issues relevant to those interested in affordable housing. Issues related to banking, insurance, and transportation are not included below.
| Topic | House Financial Services Committee | Senate Banking, Housing, and Urban Affairs Committee |
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Housing program spending |
“The Committee will review and hear testimony from the Administration on those housing agency budgets under its jurisdiction. Specifically, testimony is expected from” HUD, RHS, and “the National [sic] Reinvestment Corporation.” |
“The Committee will continue to seek bipartisan consensus on a new structure for housing finance. Following up on the discussions that began in the 112th Congress, the Committee will also focus on ways to reduce the government footprint in the housing market while ensuring access, affordability, stability and fairness in the mortgage market.” |
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NeighborWorks America (officially the Neighborhood Reinvestment Corporation) |
Not mentioned. | |
| Combining or streamlining housing programs | “According to the GAO, there are 20 different entities administering 160 housing programs. Accordingly, the Committee will also review current HUD and RHS programs with the goal of identifying inefficient and duplicative programs for further review and potential streamlining.” | Not mentioned. |
| USDA’s Rural Housing Service (RHS) | “The Committee will review the mission, organization and operations of the Rural Housing Service . . . Eligible communities are determined after each decennial census. According to the 2010 census findings, 933 communities, including 486 communities grandfathered between 10 and 29 years ago, will no longer be eligible for housing programs under the RHS after March 27, 2013. The Committee will review the 2010 census findings to ascertain their impact on meeting rural housing needs.” | “Similar to programs at FHA, these USDA programs saw a dramatic increase in participation during the housing crisis and additional oversight is necessary.” “For Americans living in rural areas and on Native American Indian reservations, the Committee will focus on how it can improve access to capital and increase capital formation for small businesses, ensure that small depository institutions in these areas serve the needs of their consumers, and enhance the role of Community Development Financial Institutions. It will also work to ensure that housing, transportation and infrastructure [are] affordable and accessible for residents in rural areas and Indian Country.” |
| Reauthorization of the Native American Housing Assistance and Self-Determination Act (NAHASDA) (expires October 1, 2013) | “The Committee will examine the need for better infrastructure and services, accountability for the use of the program, and HUD’s administration of NAHASDA funds. The fiscal year 2012 budget included $650 million for the program. As of January 1, 2013, the program had a $979.7 million obligated unexpended balance. Due to delays and inefficiencies in the program, the Committee also will review the effectiveness of NAHASDA, the reasons for the backlog of unspent funds, and whether the program is meeting its objectives.” “The Committee will . . . consider ways to scale back the NAHASDA block grant until the execution of the program is more efficient, providing needed housing infrastructure development to those Native American communities that exhibit the capacity and need to utilize such funds.” |
“For Americans living in rural areas and on Native American Indian reservations, the Committee will focus on how it can improve access to capital and increase capital formation for small businesses, ensure that small depository institutions in these areas serve the needs of their consumers, and enhance the role of Community Development Financial Institutions. It will also work to ensure that housing, transportation and infrastructure is affordable and accessible for residents in rural areas and Indian Country.” “The Committee will seek to enact long-term reauthorizations with appropriate improvements, as necessary,” for several statutes, including NAHASDA. |
| Community Development Block Grant (CDBG) program | “The Committee will consider ways to scale back the CDBG program, including but not limited to changes in the current distribution of CDBG formula funds to target extremely low-income communities. In addition, the Committee will review the eligible activities and oversight and administration of the program with the aim of ensuring that funds are used in an appropriate manner and with the express purpose of reducing the cost of the program.” | Not mentioned. |
| HOME Investment Partner-ships Program (HOME) | “The Committee will continue to monitor the HOME Investment Partnerships Program.” | Not mentioned. |
| Section 8 Housing Choice Voucher Program | “The Committee will continue its effort to address HUD’s largest rental assistance program and the government’s role in the future of affordable rental housing. The Committee will review the rising costs of the Section 8 program, as funding for the Section 8 program continues to increase and consume the bulk of HUD’s discretionary budget. Funding for the Section 8 program in fiscal year 2012 was $27.60 billion, representing a 62 percent share of the entire HUD FY 2012 budget. The Committee will review whether the rental assistance program met its program objectives in a manner that leverages taxpayer investments in affordable housing without duplicating successful private-sector initiatives.” | “The Committee may also consider proposals to streamline and improve the Section Eight and public housing rental housing assistance programs. The Committee may also conduct hearings and consider additional legislation on issues confronting the HUD and USDA federal rental assistance programs, including the need to preserve or replace affordable assisted housing that could be lost through expiring assistance contracts or physical obsolescence.” |
| USDA Rental Assistance program | Not mentioned. | |
| HUD’s worst case housing needs study | “The Committee will also review HUD’s study entitled ‘Worst Case Housing Needs: A Report to Congress,’ which is designed to measure the scale of critical housing problems facing low-income and unassisted American renting households and the impact the recent recession and related joblessness has caused.” | Not mentioned. |
| Consumer Financial Protection Bureau | “The Committee will seek to ensure that the CFPB’s regulatory, supervisory and enforcement initiatives protect consumers against unfair and deceptive practices without stifling economic growth, job creation, or reasonable access to credit. In particular, the Committee will review CFPB enforcement actions to determine whether such actions are based on clearly articulated rules and the extent to which such actions are based on discretionary, arbitrary and undefined standards. The Committee will also review how the CFPB collaborates and coordinates with other Federal and State financial regulators, and how the CFPB is fulfilling its statutory duty to ensure that ‘outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burdens.’ The Committee will continue to examine whether the CFPB’s budget and its source of funding is appropriate as well as whether the CFPB’s budget should be subject to Congressional appropriations. The Committee will evaluate the powers of a presidentially appointed, non-Senate confirmed Director to write rules, supervise compliance, and enforce consumer protection laws. The Committee will monitor the impact of CFPB actions on small businesses and on financial institutions of all sizes, and in particular, on those with fewer than $10 billion of assets.” “The Committee will closely review recent rulemakings by the Consumer Financial Protection Bureau and other agencies on a variety of mortgage-related issues. The Committee will monitor the coordination and implementation of these rules and the impact they will have on the cost and availability of mortgage lending for consumers and creditors. Of particular interest to the Committee will be recently proposed or finalized rules on the Dodd-Frank Act’s ability-to-repay and Qualified Mortgage requirements, mortgage servicing, escrows, high-cost ‘HOEPA’ loan restrictions, negative amortization, points and fees on open-end credit, appraisals, and origination disclosures.” |
“Consumer Protection continues to be a key area of interest to the Committee. . . . [The CFPB] has the statutory authority to implement and enforce the federal consumer financial laws to ensure that markets for consumer financial products and services are fair, transparent and competitive. As with all federal financial regulators under its jurisdiction, the Committee will continue its active oversight of the CFPB through frequent hearings and staff briefings on the agency’s activities, including its rulemakings.” “Several mortgage-related rulemakings and the Basel III capital standards regarding mortgages will also need to be examined to better understand how these provisions are interacting, protecting consumers and the economy, and affecting availability of mortgage credit. These include:
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| Fannie Mae and Freddie Mac | In conservatorship, “Fannie Mae has tapped $16.1 billion and Freddie Mac has used nearly $71.3 billion in taxpayer funds, making the GSE conservatorship the costliest of all the taxpayer bailouts initiated during the crisis. The cost of this bailout has raised fundamental questions about the viability of the GSEs’ hybrid public-private organizational model, the market effects of their implicit-turned-explicit government guarantees, and the structure of the U.S. housing finance system. The Committee will examine proposals to modify or terminate Fannie Mae’s and Freddie Mac’s statutory charters, harmonize their business operations, and wind down any legacy business commitments.” “The Committee will examine the overall size of the GSEs’ footprint in various aspects of the housing finance system and ways to reduce or constrain their large market share and develop a vibrant, innovative and competitive private mortgage market. Areas of interest for the Committee will include the calculation of FHFA’s House Price Index, the determination of the conforming loan limits in conventional and high-cost areas, the pricing of guarantee fees to reflect the risk of the mortgages purchased by the GSEs, and the size of the GSEs’ retained investment portfolios. . . . To ensure that the GSEs are not engaging in risky activities that undermine the conservatorships, the Committee will examine the relationships that Fannie Mae and Freddie Mac maintain with non-profit organizations that provide services, including housing counseling, to potential homeowners. The Committee will also examine whether the payments nonprofits receive for services provided to the GSEs are appropriate; whether GSE funds provided to non-profits are used for political activities; and whether adequate procedures are in place to protect the GSEs from fraud.” “The Committee will review Fannie Mae’s and Freddie Mac’s guidance to mortgage servicers and participation in government mortgage modification programs generally to ensure that undue political influence does not result in even greater losses to taxpayers from the GSE conservatorships.” | “The Committee will continue to seek bipartisan consensus on a new structure for housing finance. Following up on the discussions that began in the 112th Congress, the Committee will also focus on ways to reduce the government footprint in the housing market while ensuring access, affordability, stability and fairness in the mortgage market.” |
| Federal Housing Finance Agency (FHFA) | “The Committee will monitor the activities and initiatives of the Federal Housing Finance Agency . . . The Committee will pay particular attention to the FHFA’s discharge of its duties as conservator to promote the long-term stability of the housing market and to ensure that taxpayer losses are minimized and private sector participation in the housing finance market is encouraged. The Committee will also consider the appropriate role, if any, for the Federal government in the secondary mortgage market, including the harmonization of existing GSE business operations and the development of new securitization platforms and alternative mortgage financing options.” | “The Committee will also seek ways to help families, communities, and the housing market recover from the effects of the housing downturn. Building upon efforts last Congress to expand refinancing opportunities for underwater borrowers, the Committee will work to make refinancing easier and more equitable for responsible homeowners. We will continue to engage the Federal Housing Finance Agency (FHFA), the Board of Governors of the Federal Reserve System (Federal Reserve), the U.S. Department of Housing and Urban Development (HUD), and stakeholders to explore the best solutions to help communities and responsible homeowners.” |
| Federal Home Loan Bank (FHLB) System | “The Committee will monitor the capital requirements and financial stability of the Federal Home Loan Bank System, as well as the FHLB System’s ability to fulfill its housing mission and provide liquidity to the cooperative’s member banks in a safe and sound manner. The Committee will pay particular attention to concerns regarding insufficient retained earnings and the quality of private label securities portfolios maintained by individual Federal Home Loan Banks.” | Not mentioned. |
| Federal Housing Administration (FHA) | “Increased delinquencies and foreclosures across the nation have had a detrimental effect on the financial health of the Federal Housing Administration. . . . Because the FHA guarantees 100 percent of the loan amount on the mortgages it insures and is ultimately backed by the Federal government, a large number of defaults could result in significant losses to the FHA, and those losses may ultimately be borne by taxpayers. The Committee will examine the appropriate role for FHA in the mortgage finance system, how to encourage more robust private sector participation, and the ability of the FHA to continue to take steps to manage its mortgage portfolio and mitigate its risk.” | “The Committee will continue to conduct oversight on the condition of the Mutual Mortgage Insurance (MMI) fund at the Federal Housing Administration (FHA) and the role the FHA plays in the housing market. The Fiscal Year 2012 actuarial report projected that the MMI fund’s capital reserve ratio would be negative for the first time while projecting that the current books of business are expected to perform at historically high levels resulting in a greater economic value of the MMI fund. While this does not indicate that the FHA is insolvent, it does require the Committee to examine the health of the FHA more closely and comprehensively and take action where necessary.” |
| Foreclosure mitigation/mortgage relief programs |
“The Committee will continue to examine the operation of the Troubled Asset Relief Program . . . to ensure that the program is being administered properly and that any instances of waste, fraud or abuse are identified and remedied.” |
“The Committee will also seek ways to help families, communities, and the housing market recover from the effects of the housing downturn. . . . The Committee will work to make refinancing easier and more equitable for responsible homeowners. We will continue to engage the Federal Housing Finance Agency (FHFA), the Board of Governors of the Federal Reserve System (Federal Reserve), the U.S. Department of Housing and Urban Development (HUD), and stakeholders to explore the best solutions to help communities and responsible homeowners.” “The Committee will continue oversight of the winding down of the Troubled Asset Relief Program (TARP), including the repayment of taxpayer funds and efforts to assist responsible homeowners.” |
| Regulatory burden reduction | “The Committee will continue to review the current regulatory burden on banks, thrifts, and credit unions with the goal of reducing unnecessary, duplicative, or overly burdensome regulations, consistent with consumer protection and safe and sound banking practices.” | “The Committee will closely monitor a number of issues related to community banks and credit unions, including mortgage origination, appraisals, interactions with the CFPB, and risk management. Specifically, the Committee will continue to review the examination policies of the depository institution regulators, ensuring that examinations are balanced in a manner that does not discourage prudent lending while promoting consumer protection and safety and soundness. For larger financial institutions, in addition to monitoring the implementation of stricter prudential standards required by the Wall Street Reform Act for the so-called ‘Systemically Important Financial Institutions,’ the Committee will continue to oversee the risk management policies of these institutions, and the supervision by the bank regulators of these policies.” |
| Community Reinvestment Act (CRA) | “The Committee will continue to review developments and issues related to the Community Reinvestment Act of 1977, including recommendations for updating or eliminating CRA requirements in light of changes in the financial services sector.” | Not mentioned. |
| Federal programs under the jurisdiction of the Committee on Financial Services that will be reviewed for possible cuts, elimination, or consolidation into other Federal programs. | Lists five items:
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Not mentioned. |