WASHINGTON — The new slate of House Republicans picked to preside over financial services staked out an ambitious set of policy goals Thursday, saying they intend to downsize or dismantle the government mandates supported by their Democratic predecessors.
Out of the gate, the new subcommittee chairs for the Financial Services Committee said reining in the government-sponsored enterprises and revamping portions of the Dodd-Frank Act — including creation of the Consumer Financial Protection Bureau — were top priorities.
The CFPB is "a moving target right now in terms of where it's going and we will look at it closely and hopefully reshape it," said Shelley Moore Capito, R-W.V., the new chairwoman of the financial institutions subcommittee.
While subcommittee chairman sometimes are merely figureheads, Rep. Spencer Bachus, who will chair the full panel next year, reiterated Thursday that he expects his picks to take a lead role in setting the committee's agenda.
Some of the new panel heads are the most outspoken critics of areas they will oversee. The most obvious example was Rep. Ron Paul, R-Texas, the new head of the domestic monetary policy subcommittee, who has made a career out of arguing against the Federal Reserve Board. Likewise, Rep. Scott Garrett, R-N.J., a vocal critic of Fannie Mae and Freddie Mac, will now lead the subcommittee focused on the government-sponsored enterprises.
"While there will be a number of very important issues on the subcommittee's plate during the 112th Congress, winding down Fannie Mae and Freddie Mac will be priority number one," Garrett said in a press release. "With the American taxpayers already on the hook for $150 billion and counting to bail them out, we need to be taking concrete steps to reduce the ongoing financial risk they pose to the country and eradicating the bailout culture of Capitol Hill."
To be sure, there were lawmakers that voiced more caution. Rep. Gary Miller, R-Calif., the new chairman of the international monetary policy subcommittee, warned against overly drastic moves to shake up the GSEs. In an interview, he said he wanted to play an active role on Fannie and Freddie oversight.
"There's no doubt we need to reform the system," but "just to go out and say, 'We are going to turn the market upside down,' and act as if they don't exist and that they shouldn't exist in the future would have an incredibly negative impact on the overall housing market," he said.
"We're dealing with a stressed market as it is. We need to be very cautious about what we do. We do need to make sure they are acting in a safe and sound fashion, but they are providing such a huge portion of the marketplace right now as far as liquidity goes we need to be cautious about what we do and we need to be careful of the message we send."
He argued that the GSEs command too much of the mortgage market to justify doing anything too extreme.
"When you look at it between" the Federal Housing Administration "and the GSEs, they are 98% of the marketplace," Miller said. "Without them you couldn't give a house away. We need to be very cautious about that. And banks work very well with the GSEs. We need to strengthen that relationship but make sure we do it in a safe and sound fashion."
Other appointments announced Thursday included Rep. Jeb Hensarling, R-Texas, as vice chairman for the full committee. Rep. Judy Biggert, R-Ill., was selected as chairwoman of the insurance, housing and community opportunity subcommittee. Rep. Randy Neugebauer, R-Texas, was chosen as chairman of the oversight and investigations subcommittee.
Biggert rattled off a laundry list of existing statutes — not only Dodd-Frank — that needed reexamining. In addition to GSEs and Dodd-Frank, she cited property and casualty insurance, mortgage servicing, the Housing and Urban Development Department, terrorism risk insurance, and the Community Reinvestment Act as areas to which she will devote attention.
"On a broad base we have to focus on jobs and the economy and I think this subcommittee will be helpful in that," she said in an interview. "I think that means looking at issues ranging from Fannie Mae and Freddie Mac to homeless assistance to really systemic insurance provisions of the Dodd-Frank bill and things like flood insurance. It will be a lot to cover and as a former real estate attorney I really have the goal to instill confidence in our housing market and give consumers access to information they need to make wise decisions."
She acknowledged her agenda was ambitious.
"I look forward to doing the oversight on so many issues," she said. "There's a lot to do."
Capito said the full committee's overriding goal is to find ways to help boost the economy.
"We are going to keep our eye on the fundamentals: job impact, job creation and also the other prevailing notion of how do we rein in government and government spending and there's obviously oversight on a lot of different bodies and parts of government and these are the things we are going to be looking at," she said.
Miller said key goals for his subcommittee include moves meant to unfreeze credit and remove regulatory restrictions on banks. He said he plans to continue to reach out to bankers in the coming weeks, and also plans to engage Realtors, homebuilders, mortgage brokers and other groups.
"We have to do what we can to unfreeze credit really and restore confidence in the financial markets, and we need to look at Dodd-Frank and repeal the job-killing provisions that are unnecessarily punishing businesses," he said.
It was unclear Thursday which Democrats would be chosen for ranking positions on the subcommittee. Biggert said she had heard a rumor that Rep. Maxine Waters, D-Calif., now the chairwoman of the housing subcommittee, would seek a ranking position somewhere else. Biggert also said she expected the size of the full committee to shrink.
"We've heard from leadership that they want to pare down the committee somewhat and have members have fewer committees, so that they have time to get to their hearings and participate and the time to get ready for the hearings," she said.
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