New FHFA Director Stresses Need for Reform at Swearing in Ceremony

During his swearing in ceremony at the Federal Housing Finance Agency (FHFA), Dr. Mark Calabria stressed the need for housing finance reform. Calabria was sworn in as the second Senate-confirmed director of the agency by Vice President Mike Pence. Dr. Calabria served as the vice president’s chief economist since February 2017.

In his speech, Calabria indicated the agency would work with the Trump administration on issues outlined in the recent presidential memorandum. He said it is important to "cement those gains" made since the 2008 financial crisis and continue to build a strong foundation for the FHFA's oversight.

Calabria also noted the risks of the housing cycle and that "we must prepare for the inevitable downturn" and acknowledge the impact bad mortgage financing policies have on American families.

"The mortgage market was at the center of the last crisis, as it has been for many past financial crises, both in America and globally," Calabria said. "I believe the foundations of our current mortgage finance system remain vulnerable. After years of strong house price growth, too many remain locked out of housing, while others are dangerously leveraged. We must not let this opportunity for reform pass."

CUNA wrote to the newly sworn-in FHFA director who will serve a five-year term.

“As the momentum once again swings toward completing housing finance reform, your leadership will be crucial on this and other important issues under the agency’s purview,” wrote CUNA President/CEO Jim Nussle. “We are excited by your appointment and the opportunity that it presents to ensure a sound, well-functioning secondary market for the conventional, thirty-year, fixed-rate, government-backed mortgage loans that credit unions’ members both need and expect.”

CUNA shared its principles for housing finance reform, which include:

  • Equal access to lenders of all sizes;
  • Access to predictable, affordable mortgage payments for qualified consumers;
  • A Reasonable and Orderly Transition to any new housing finance system;
  • Strong oversight and supervision of secondary market entities;
  • An explicit federally insured or guaranteed component to ensure that the secondary mortgage   market continues to exist; and
  • The housing finance system should preserve the things that work, which includes:
    • Cost-effective and member-oriented credit union mortgage servicing options;
    • Emphasizing consumer education and home-purchase counseling; and
    • Applying reasonable conforming loan limits that adequately consider local real estate expenses in higher cost areas.

CUNA’s letter also points out to Calabria CUNA’s concerns with FHFA’s pending proposal on Federal Home Loan Banks’ Affordable Housing Goals. CUNA is concerned that comments accompanying the proposed regulation appear to specifically exclude credit unions from being eligible to participate in the newly created smaller member participation requirement.

The letter also reiterates CUNA’s call for the FHFA’s continued coordination with other federal regulatory agencies, including the Consumer Financial Protection Bureau. 

Prior to his work in the White House, Dr. Calabria was director of financial regulation studies at the Cato Institute.  He also spent six years as a senior aide to the U.S. Senate Committee on Banking, Housing, and Urban Affairs, where he handled issues related to housing, mortgage finance, economics, banking and insurance.  Prior to his work on Capitol Hill, Dr. Calabria served as a deputy assistant secretary for regulatory affairs at the U.S. Department of Housing and Urban Development. He has also held a variety of positions at Harvard University's Joint Center for Housing Studies, the National Association of Home Builders and the National Association of Realtors.  Dr. Calabria has also been a research associate with the U.S. Census Bureau's Center for Economic Studies. 

He holds a doctorate in economics from George Mason University. ​​