Two Texas Republicans taking lead on GSE privatization, CFPB creation
Two Texas Republicans on powerful House committees are quickly becoming the voice of the right regarding the dismantling of Freddie Mac and Fannie Mae, and the creation of the Consumer Financial Protection Bureau. Reps. Jeb Hensarling and Randy Neugebauer both have long held the belief the GSEs should be privatized. It's estimated the two companies have cost the taxpayers roughly $134 billion since being placed into conservatorship in 2008. On Monday, Neugebauer, who represents parts of the West Texas panhandle including Abilene and Lubbock, said the government should lower the maximum size of jumbo loans that the GSEs can purchase, according to multiple published reports. Last week, Neugebauer, who's chairman of the House financial services subcommittee on oversight and investigations, sent a letter to Elizabeth Warren seeking clarification on a few points. He told Warren she is "tasked with executing a fatally flawed plan" as she forms the CFPB. He asked Warren to detail the number of employees it's expected the CFPB will have, as well as potential salaries. Neugebauer also requested an update on the search for a permanent director of the bureau. As HousingWire reported Friday, there isn't even a nominee. Neugebauer is uncomfortable with how the CFPB is to be funded and would prefer the traditional appropriations process "to bring more accountability and oversight" to the new federal agency. He wants her to respond by the end of January and wants Warren to detail her discussions with numerous federal regulators. "What policies are in place to avoid potential duplicative, conflicting or overlapping rulemakings that are currently underway, but will ultimately be under the regulatory authority of the CFPB?" Neugebauer asked Warren. Both Neugebauer and Hensarling worry increased regulations will translate to increased costs for consumers as banks pass expenses associated with compling with Dodd-Frank and any CFPB mandates onto customers. Hensarling, who represents parts of east Dallas, as well as suburbs to the east and a handful of counties southeast of the city, has called Dodd-Frank "a permanent bailout bill.'" He's introduced legislation to end taxpayer-funded bailouts by creating a new chapter to the federal bankruptcy code. And last week he said he plans to reintroduce a bill to begin weaning the GSEs off the government balance sheet within five years. Meanwhile, The New York Times reported Monday that the GSEs have spent more than $160 million defending lawsuits against the companies and executives. Write to Jason Philyaw.