Federal Housing Finance Agency director Mark Calabria testifies on Capitol Hill during a committee hearing on Housing Finance Reform: Next Steps in Washington, DC, September 10, 2019.
Jim Watson | AFP | Getty Images
The Biden administration will replace the head of a giant U.S. housing finance agency after the Supreme Court ruled that its current structure is unconstitutional.
The White House is in the process of finding a replacement for Mark Calabria to head the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, an administrative official told CNBC.
The official said that in light of the Supreme Court decision, President Joe Biden will seek a new head of FHFA who better reflects the values of the government.
The decision to oust Calabria became clear after the Supreme Court ruled 7-2 on Wednesday that the Housing Authority should be more accountable to the Oval Office. Until the decision on Wednesday, the FHFA director could only be removed by the president “for an important reason”.
Similar to a similar ruling last year regarding the Consumer Financial Protection Bureau, the court’s ruling on Wednesday will give Biden and future presidents the power to remove the agency’s head at any time.
Later on Wednesday, Calabria upheld the Supreme Court’s decision and wished its successor the best of luck.
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“I respect the Supreme Court decision and the president’s authority to remove the director of the Federal Housing Finance Agency. It has been the honor of my life to serve as a director of the Federal Housing Finance Agency alongside world-class staff, ”he said in a statement posted on the FHFA website.
“I wish my successor all the best in correcting the remaining shortcomings in the home finance system to preserve home ownership opportunities for all Americans,” he added.
A holdover from the Trump era, Calabria spent much of its time at the helm of the FHFA, trying to end Fannie and Freddie’s 12 years under government control. Despite his best efforts, the libertarian economist failed to come up with a plan, attractive to former Treasury Secretary Steven Mnuchin, how best to orchestrate such a complex and risky extraction.
The Biden government, meanwhile, is not so keen on ceding housing authority to private parties, but is working to address a variety of priorities such as the racial homeownership gap.
“FHFA has an important role in overseeing Fannie Mae and Freddie Mac and the Federal Home Loan Bank System,” said the White House official. “It is vital that the agency implement the administration’s housing policy.”