WASHINGTON — Amid rumors that President Biden is considering Mike Calhoun of the Center for Responsible Lending to lead the Federal Housing Finance Agency, more observers are questioning the rationale for replacing the agency’s acting director.
Sandra Thompson, who has been in that role since June, has moved quickly to reorient the regulator’s focus, undoing many Trump-era policies that both the mortgage industry and community advocates had opposed, and earning her widespread praise.
And as a Black woman, Thompson has brought much-needed diversity to the FHFA, many observers say.
“Why would they think about nominating somebody who has no regulatory experience, manages a small nonprofit today that is focused on fair lending and who is a white male to replace an African American woman who is wildly talented, has worked inside the regulator for many, many years [and] knows the ins and the outs of the organization?” said Willy Walker, chairman and CEO of Walker & Dunlop, which finances commercial real estate and multifamily housing.
House Financial Services Committee Chair Maxine Waters last week
“It is in part due to the past and ongoing lack of representation of people of color in the senior ranks of our financial services regulators that we see stark racial and economic inequities throughout our country today,” the California Democrat said.
Many were “blown away by the optics” of the possibility of Calhoun, who is white, being chosen to replace Thompson, said David Stevens, a former commissioner of the Federal Housing Administration, especially given how aligned Thompson has proved to be with the administration’s goal of furthering affordable housing.
“The moment Sandra took over the role, she was so proactive in unwinding unfavorable policies,” said Stevens, who is now the CEO of Mountain Lake Consulting. “I'm just surprised the administration didn't just slow down everything to recognize that she's really doing a great job in the interests of the president.”
Since Thompson took the helm, the FHFA
“The organization needs leadership that understands what went on while Calabria was there, and it needs to allow the agencies to have a regulator who acts as a regulator,” Walker said. “And so the concept of bringing in another outsider to run the organizations when you've got the perfect insider there just didn't make any sense to me.”
Before assuming the role of acting director, Thompson was the deputy director of the FHFA’s Division of Housing and Mission Goals. Before joining the FHFA in 2013, she worked for 23 years at the Federal Deposit Insurance Corp., ultimately serving as its director of risk management supervision.
While at the FDIC, Thompson gained the trust of many in the industry and developed a reputation for being “really, really fair,” said Al Pina, co-founder of the National Minority Community Reinvestment Cooperative and chair and CEO of the Florida Minority Community Reinvestment Coalition.
“She absolutely does know the minority community, particularly the black community,” he said. “Losing Sandra as a female and as a Black leader is tough. If I were the president, would I have her or Calhoun? I would keep her. But I'm not president.”
Not only does Thompson's agenda appear to match that of the White House, Walker said, but giving her the permanent job would help fulfill Biden’s own pledge to appoint executive-level officials who reflect the diversity of the United States.
“It's not about Mike Calhoun. It's about the fact that they've got the right person in the seat today to achieve what this administration wants to achieve,” said Walker. “This administration has talked about diversity, and having a diverse, not only cabinet, but executive branch of the federal government. Sandra checks that box.”
Thompson’s experience within both the FHFA and the FDIC is also an asset that shouldn’t be ignored, Stevens said.
“Sandra hit the ground running when she was put in as acting director, and the only way she was able to do that was because she'd already been there since 2013 and knew the ins and outs and what she could do and couldn't do under her authorities,” he said.
Walker said he was impressed that Thompson has already
“This change to the capital rule, and also to credit risk transfer, was not a layup in any way, and was not anything that at least we were planning on seeing immediately,” Walker said.
Having the right person in place at the agency, especially as the nation is experiencing massive increases in home prices and as racial gaps in homeownership rates persist, has never been more crucial, said Pina.
“I see this as a very delicate time for housing, which means this FHFA director, who's selected and how they manage affordable housing, particularly the conservatorship with Fannie Mae and Freddie Mac, is critical,” he said.
Walker added that Thompson's moves as acting director are helping to push back inflationary pressures in the mortgage industry.
“Having someone in that role to allow [the GSEs] to get back to what they need to do to supply liquidity to the markets is exactly what we need right now,” he said. “If they can stay on that path, there really is a fantastic trajectory here to try and help with the overall housing markets, and I hope they stick with it.”
