The most unexpected part of today’s Senate Banking confirmation hearing was Mark Calabria’s disavowal of any plan to redesign the conservatorships by Administrative fiat. As we noted, Acting FHFA Director Otting clearly said not only that such a plan was taking shape, but also that Calabria had already endorsed it. Today, Calabria characterized Otting’s comments as nothing more than an employee “pep talk.” We continue to expect that the White House and Treasury will do what they can to get Calabria confirmed as fast as they can, give Crapo time to do something with his new outline, and then take administrative action before the 2020 election or early signs of housing-market trouble, whichever comes sooner.
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