In this report, we assess today’s wide-ranging House FinServ hearing with Treasury Secretary Mnuchin. Noting FHFA powers to restructure the GSEs, Chairman Hensarling (R-TX) used today’s hearing to warn Democrats of a Trump-appointed FHFA Director’s ability to curb affordable-housing programs if Congress fails to act. Mr. Mnuchin indicated that a CRA plan is due shortly (see Client Report CRA18), with the long-waited OLA policy also now nearing completion. In 2017, the Administration shook global markets by suggesting it would not use OLA in a systemic situation, with this report likely now to take a more tempered position. Mr. Mnuchin also supports designating a lead agency for the Volcker rule and exempting nonfinancial parent companies of IHCs. Rep. Barr (R-KY) pushed Mr. Mnuchin to work with the Senate on House-passed World Bank reform legislation, which the Administration supports.
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