The Biden administration’s nominee to head the Federal Housing Finance Agency, Sandra Thompson, was confirmed by a 49 to 46 Senate vote on Wednesday — a move that will make her the first African-American woman to lead Fannie Mae and Freddie Mac’s regulator.
The confirmation was largely split down the party lines with small number Republican and Democratic abstentions and an independent’s vote for Thompson deciding the matter.
Republicans like Sen. Pat Toomey, R.-Pa., had maintained steady opposition to Thompson, citing objections to her operationalizing of the administration’s expansive and equitable housing policies in her role as acting FHFA director.
Sandra Thompson, director of the Federal Housing Finance Agency (FHFA) nominee for U.S. President Joe Biden, listens during a Senate Banking, Housing, and Urban Affairs Committee confirmation hearing in Washington, D.C., U.S., on Thursday, Jan. 13, 2022. Thompson, the career government official who’s leading the FHFA on an acting basis, if confirmed would run Fannie Mae and Freddie Mac’s regulator permanently. Photographer: Al Drago/Bloomberg
“Ms. Thompson has increased risk taking at the GSEs and reduced taxpayer protections in order to advance the administration’s radical housing policy,” Toomey said in a press statement issued on Wednesday. “I could not vote to effectively ratify policies that have made a red-hot housing market even hotter, and take ownership of the bailouts and foreclosures that may follow.”
The fact that the acting head of the Federal Housing Finance Agency had expressed interest in freeing Fannie Mae and Freddie Mac from conservatorship, which could reduce taxpayer exposure, may have helped break the deadlock between parties.
To date, several efforts by legislators and the previous administration to reform the two GSEs, which went into conservatorship during the Great Recession, have failed; and Thompson has acknowledged their status as government wards has gone on longer than expected.
“Certainly no one ever expected the enterprises, or any financial institution, to be in conservatorship for 13 years,” she said during a confirmation hearing.
Thompson pledged to keep risk mitigation at top of mind if she was named permanently to lead the FHFA.
“The safety of soundness of the housing GSEs, Fannie Mae and Freddie Mac — they’ve just been allowed to retain, to build capital, and retain earnings — and we think that that is very important,” said Thompson.
While Thompson said she would be willing to help position the GSEs for an exit, she also indicated in the hearing that Congress would need to take action on any changes to their structures, which were initially established through legislation.