Two groups of Democratic senators are calling on Federal Housing Finance Agency Director Bill Pulte to justify the legality of recent personnel changes and provide increased transparency around long-term goals.
Sen. Jack Reed, D-R.I., led one group of six legislators who questioned the legalities around board changes at the agencies the FHFA oversees. Another group of eight that Sen. Lisa Blunt Rochester, D-Del., heads up seeks more information on broader reforms.
The inquiries from the two partly overlapping groups of Democrats raise questions around whether or not some FHFA orders affecting key quasi-public mortgage industry entities could face formal challenges.
“We write to request clarity regarding your plans with respect to the FHFA, the nation’s housing
finance system and the conservatorships,” the group of eight Senate Democrats said in their letter about the broader issues.
FHFA follows all statutory requirements and responds to letter writers directly.
Both letters set deadlines for those responses. Blunt Rochester’s group calls for answers to their broader questions about Pulte’s goals and the housing system by April 14. The other led by Reed, which is critical of new board appointees’ credentials and alleges conflicts with existing rule sets, seeks an answer by April 4.
“In addition to naming individuals who appear wholly unqualified to serve, the manner in which you have reconstituted the boards appears to violate federal law and FHFA’s own regulations,” the group of six senators said in their letter.
In addition to Reed, Sens. Elizabeth Warren, D-Mass.; Tina Smith, D-Minn.; Chris Van Hollen, D-Md.; Catherine Cortez Masto, D-Nev.; and Blunt Rochester signed the letter questioning personnel decisions. Warren is the ranking member of the Senate Banking, Housing and Urban Affairs Committee.
They specifically had questions about a federal law they alleged “prohibits the FHFA director from holding any office, position or employment in Fannie and Freddie,” as well as agency regulations the senators said require an “independent” chairman of the two entities’ boards.
“Federal law also requires the boards of these companies to include at least one person from an organization that has represented consumer or community interests, or has shown a career commitment to low-income housing,” they added, questioning whether the boards reflect this.
In related news about board members’ credentials, Freddie added some for a new appointee initially listed without them. Freddie identified Michael Parrott as CEO and founder of 480th Consulting, a business advisory firm that utilizes artificial intelligence-driven analytics in its work.
Pulte put himself and FHFA General Counsel Clinton Jones on both entities’ boards. Several members faced pressure to leave or resigned. Also, Freddie Mac CEO Diana Reid departed and President Mike Hutchins replaced her on an interim basis.
The FHFA additionally has issued a return to work order at the enterprises in a transition from hybrid staffing polices. Pulte has reportedly been looking at slashing the workforce in line with broader federal efficiency efforts while promising career opportunities for those who stay or join.
Members of the group Blunt Rochester led said they were “concerned” about reported staffing changes, including FHFA executive departures, placements of 35 unionized employees from that agency on administrative leave, and closures of two units for a total 10% workforce cut.
That group’s letter also looked for clarity on bigger aims around how housing could be reformed through the FHFA.
Sens. Charles Schumer, D-N.Y.; Ron Wyden, D-Ore., and Andy Kim, D-N.J.; and all the signatories to the letter about personnel moves, except Van Hollen, also put their names on the broader query.
