The Times, Trenton

U.S. Rep. Mel Watt Is Right Choice To Head Federal Housing Finance Agency

The Times of Trenton — Friday, May 31, 2013

By Phyllis Salowe-Kaye
Times of Trenton Guest Opinion Column

Earlier this month, President Obama nominated Rep. Mel Watt (D-N.C.) to head the Federal Housing Finance Agency (FHFA), the entity that regulates housing financing giants Fannie Mae and Freddie Mac. The nomination and the potential shift in direction for the agency are particularly important in light of the persistent housing market crisis and the significant role Fannie and Freddie play in the mortgage industry.

Acting FHFA Director Edward DeMarco and his unyielding refusal to allow principal reductions for the millions of mortgages that Fannie and Freddie back are considered enormous obstacles to getting the housing market back on track. Supporters of the nomination see appointing Rep. Watt as a welcome breakthrough toward long-overdue policy changes at FHFA and ending the crisis.

Watt's nomination has sparked uncommon agreement among the nation's leading consumer groups as well as the National Association of Realtors and the National Association of Home Builders. It must also be noted that Rep. Watt's nomination has drawn rare bipartisan support from senators as politically diverse as Elizabeth Warren (D-Mass.) and Richard Burr (R-N.C.).

Despite this broad support and urgent need for change at FHFA, and despite the fact that New Jersey continues to rank among the states hardest hit by the housing market crisis, New Jersey's own Rep. Scott Garrett (R-Glen Rock) is, incomprehensibly, among the few who oppose this nomination.

In a recent and harshly worded guest opinion piece for an industry publication, Rep. Garrett cites "campaign contributions and other actions" as evidence that his colleague "doesn't have the necessary qualifications" for the FHFA job. Garrett also incorrectly claims that Rep. Watt has repeatedly voted against the interests of ordinary citizens on issues related to financial services and housing.

Setting aside the unusual personal attack on a colleague, it is astonishing that Rep. Garrett is accusing someone else of bowing to special interests behind campaign contributions.

According to the Center for Responsive Politics, which compiles campaign contribution data, securities and investment firms provided almost half (48.6 percent) of all the money Rep. Garrett's campaign spent on his 2012 re-election effort.

Considering his own voting record, Garrett's questioning of Rep. Watt's commitment to consumers and to taxpayers is downright Orwellian. In the last two years, Rep. Garrett voted in favor of a bill to undermine the new Consumer Financial Protection Bureau's ability to rein in deceptive lending practices. Rep. Garrett also voted in favor of bills to allow private equity funds to hide conflicts of interest from their investors, to exempt bank subsidiaries from rules on trading abuses in the derivatives market and he voted yes on a bill to discourage whistleblowers from exposing criminal activity at financial institutions.

Furthermore, Americans for Financial Reform, an independent, nonpartisan consumer watchdog, found that Rep. Garrett sided with his industry patrons against consumers 100 percent of the time on 11 high-profile financial services bills in the last Congress.

In contrast, Rep. Watt sided with industry only 9 percent of the time and sided with consumers 91 percent of the time. It is stunning irony for Rep. Garrett to question the fitness of his colleague's ability to protect the interests of Main Street over those of Wall Street.

Rep. Watt has a long history of fighting predatory lending and advocating for affordable housing and has demonstrated a stalwart commitment to economic justice and protecting consumers. As a prominent member of the House Financial Services Committee, he also has extensive experience working on financial issues, which makes him an excellent candidate for FHFA director.

The housing market is just beginning to show signs of recovery, but far too many homeowners in New Jersey and across the nation remain "under water" or still face foreclosure. The next director of FHFA will have to work with industry and housing groups alike and will need support from both Democrats and Republicans.

Once again, Rep. Garrett is wrong, and he continues to look out for Wall Street instead of Main Street. President Obama is right and has made a brilliant decision to nominate Rep. Mel Watt to direct the Federal Housing Finance Agency.

Phyllis Salowe-Kaye is executive director of New Jersey Citizen Action. She is a former member of the Federal Reserve Consumer Advisory Council.

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