The Biden administration on Friday named longtime regulator Phyllis Fong as the acting inspector general of the Federal Housing Finance Agency (FHFA) following the resignation of her predecessor, Laura Wertheimer, who was investigated for abusing her authority.
Fong will be the senior official in the Office of Inspector General responsible for audits, investigation and other oversight of the FHFA, which regulates the government sponsored entities, Fannie Mae and Freddie Mac. She will continue to serve as the inspector general for the U.S. Department of Agriculture, a job she has held since 2002.
“We strive to be good stewards of the resources taxpayers have entrusted to us,” said Acting FHFA Director Sandra Thompson in a statement. “Inspector Fong’s leadership in FHFA OIG will provide the oversight required to ensure that FHFA executes our mission in an efficient and effective manner without waste, fraud, or abuse.”
At the USDA, Fong has focused heavily on food safety, public health and management of the agriculture department’s programs, the Biden administration said. Prior to her appointment as regulator of the USDA, Fong served as the inspector general of the Small Business Administration.
From 2008 to 2014, Fong served as the first chair of the Council of the Inspectors General on Integrity and Efficiency (CIGIE), an independent agency Congress established in the Inspector General Reform Act of 2008.
This white paper will explore the state of loan servicing and looming issues as the industry continues to move through unprecedented times.
Presented by: Clear Capital
The former IG for the FHFA, Wertheimer, announced her resignation in June. Her announcement followed investigations from the CIGIE and two Republican senators that found she had committed misconduct and abused her authority.
The report noted years of complaints against Wertheimer and other staff members and concluded that “misconduct of this nature warrants consideration of substantial disciplinary action, up to and including removal.”
The report claimed that Wertheimer “showed a disdain and resistance” toward oversight from Congress and the CIGIE and created a “culture of witness intimidation through a pattern of staff abuse and fear of retaliation.” The report also said Wertheimer refused to cooperate with the investigation.
Wertheimer’s attorney, Emmet Flood, disputed the report’s findings. He told the Washington Post that Wertheimer didn’t play a role in determining which materials to provide to CIGIE investigators or obstruct or resist the investigation. He told the paper that the report did not include witness names, which made it difficult to respond to specific complaints about witness intimidation.
Biden has moved quickly to overhaul the leadership and priorities of the FHFA. Following the Supreme Court decision on Mnuchin v Yellen, Biden removed Trump appointee Mark Calabria as head of the agency. Hours later, Biden named Thompson – a top FHFA official since 2013 who’d previously spent 23 years at the FDIC – as acting director.
In her early tenure, Thompson has taken actions to preemptively align Fannie Mae and Freddie Mac servicers with a rule to safeguard borrowers. She lowered barriers for COVID-19-impacted borrowers to reduce their interest rates on refis. She has also done away with the much-loathed 50-basis-point adverse market refi fee.
In public statements, Thompson has reiterated the Biden administration’s commitment to closing the racial homeownership gap, and she has indicated she will leverage FHFA’s influence over the housing market to make it more equitable. It is not clear how she plans to accomplish that goal, but FHFA is well-positioned to expand credit availability at a national scale.