President Obama will nominate Rep. Mel Watt (D-NC) today to be the Director of the Federal Finance Housing Finance Agency (FHFA). Many have called for the firing of the agency’s current director, Ed DeMarco. DeMarco has headed the agency since 2009 and was a Bush appointee. Watt’s nomination is subject to Senate confirmation.
Watt played a key role in the he Dodd–Frank Wall Street Reform and Consumer Protection Act that is now law and has been an advocte for minority lending institutions. Watt is 67 and a graduate of Yale Law School. He has served in Congress since 1993 and has been a member of the House Financial Services Committee for 20 years.
The role of the FHFA Director is to oversee the two mortgage financing companies Fannie Mae and Freddie Mac. Both were taken over by the government after taxpayers bailed them out to the tune of $170 billion after the subprime foreclosure fiasco. The subprime mortgage meltdown has been the primary reason for a massive loss in middle class wealth over the last five years including a massive loss of wealth in the Black community.
If Watt is confirmed by the Senate his service would represent a big departure in policy and priorities as compared to DeMarco. As the Obama Administration has been criticised for not assisting underwater homeowners enough, DeMarco has stood in the way and instead sided with financial interests.
In a July 2012 column called “Fire Ed DeMarco,” New York Times columnist Paul Krugman wrote, “there is simply no way that it makes sense for an agency director to use his position to block implementation of the president’s economic policy, not because it would hurt his agency’s operations, but simply because he disagrees with that policy.”
President Obama has come under criticism for not hiring any African Americans to top positions at the start of his second term. Over 10 hires since January, there had been no Blacks nominated to the cabinet until Monday when the President nominated Charlotte Mayor Anthony Foxx to be Secretary of Transportation. Congressional Black Caucus Chair Marcia Fudge (D-OH) wrote the President on March 11 on the lack of diversity in his cabinet.
After Foxx was nominated on Monday, Rep. Bennie Thompson (D-MS) wrote, “we look forward to continued efforts to advance diversity throughout the Federal system. This Administration must work not to be viewed as lax on diversity issues, and the statistics should reflect the same.” Now, with the nomination of Watt to an agency that is directly related to one of the most important issue on the black agenda — the foreclosure crisis — many who pounced on the President on the diversity issue are likely to be pleased.