Biden’s influence on the future of Fannie Mae and Freddie Mac – The government-controlled corporations behind roughly half of US residential mortgages also depend on the courts. The Supreme Court ruled earlier that a law stating that the director of the Bureau of Consumer Financial Protection can only be dismissed for compelling reasons is unconstitutional, giving the president more leeway to remove the agency’s head.
The Supreme Court is expected to rule over a similar case next year that will challenge the structure of Fannie and Freddie’s regulator, the Federal Housing Finance Agency, which is also managed by a single director with a five-year term and can only be dismissed for good cause.
An FHFA director appointed by Biden would put a brake on the agency’s plan to end the twelve years of Fannie and Freddie’s state control as Democrats fear affordable housing will be less of a priority for the new private companies. The companies have also played an important role in the federal government’s response to the economic crisis caused by the coronavirus, so plans to outsource could be abandoned altogether.
But Biden will have an easier time replacing the currency converter quickly. a leading banking regulator giving him the power to stop Trump’s revision of the Community Reinvestment Act, the landmark law to combat redlining or discrimination in lending.
Former Comptroller Joseph Otting’s rewrite of the rules under the 1977 law designed to help low-income borrowers and minorities has been criticized by Democrats, community groups, and even banks. Democrats warn that the new approach would place too much emphasis on the dollar amount a bank invested in poorer areas rather than getting a community’s contribution to what it needs.
Both the FDIC and the Federal Reserve have expressed an interest in a final update of the rules as they haven’t been modernized since the advent of online banking. Coupled with the lack of support for the Office’s approach to currency control and the renewed focus on racial justice in general, banking agencies would likely put the credit rating agency high on their list of priorities under democratic governance.