As soon as the Department of Justice released a memo confirming the legality of President Obama’s decision to appoint Richard Cordray to head of the Consumer Finance Protection Bureau while Congress is in recess, speculation started that the same may happen for a new head of the Federal Housing Finance Agency.
“This gives Obama the green light to appoint a new FHFA head before his State of the Union Speech,” tweeted Mike Bergen @BergenCapital on Twitter. (The president’s annual speech to the nation is set for Jan. 24, and Congress is back in session Jan. 23.)
It’s an excellent point, and while President Obama is free to do so, it’s a move not likely to happen.
Certainly the administration wants current FHFA head Edward DeMarco gone. His aversion to principal reduction at Fannie Mae and Freddie Mac does not sit well in the housing ideology of the White House and Federal Reserve.
The upcoming departures of the government-sponsored enterprise CEOs — Mike Williams and Ed Haldeman, who are also staunch opponents of principal reduction — leave an opening for the appointment of administration-friendly replacements.
But while Obama has the green light, there are a few nagging points that make such an action unlikely.
The biggest argument against can be found with Cordray himself. It isn’t as if he was appointed overnight. He was acting director for some time. Both he and his predecessor, Elizabeth Warren, faced numerous challenges in landing a permanent spot, so much so that Warren could not survive the process.
Obama also has yet to try to work with Republicans to replace DeMarco. In battling publicly over Cordray, the president became justified in giving him the job when his opposition could no longer stand in the way.
Furthermore, with the CEOs on the way out, the justification for replacing the bosses boss is diminished. If the administration was to attempt to move an, as yet unknown, candidate into the head of the FHFA, it would open the door to valid criticism from opponents.
It’s another fight President Obama won’t be willing to take on just yet.
Write to Jacob Gaffney.
Follow him on Twitter @jacobgaffney.
