WASHINGTON – Senate Banking Committee Chairman Mike Crapo said Wednesday that although he plans to begin working on housing finance reform and changes to the Dodd-Frank Act, the poor relationship between Democrats and Republicans will hinder any progress.
“The climate right now in the Senate is toxic as I have ever seen,” the Idaho Republican said at an event sponsored by the law firm Jones Walker. “What is happening in the Senate right now … is a very slow process, much more slow than ever we have seen before and that impacts everything else.”
Democrats have hampered President Trump’s Cabinet appointees, eating up days at a time on a single nominee, which makes finding floor time to pass legislation difficult.
“Congress can in most cases walk and chew gum at the same time, so that doesn’t mean there is going to be no action on any other issue, but it means that ... floor time in the Senate is much more difficult to get than in the House,” Crapo said.
However, Crapo, who led previous legislative efforts at reforming the housing finance system, said it remains a “very high priority.” He said he has taken up the issue with top Trump administration officials, including Treasury Secretary Steven Mnuchin.
“My hope would be” that housing finance reform gets passed “within the next 12 months, but the practical reality is it might” take longer, Crapo said.
He said that old concepts for housing finance – including one he co-sponsored with then-Senate Banking Committee Chairman Tim Johnson, D-S.D., in 2013 – and new ones will be discussed. The Johnson-Crapo bill was approved by the committee in 2014 but had too little support to make it to the full Senate. The plan would have created a Federal Deposit Insurance Corp.-type model for the mortgage business, with an explicit government guarantee for catastrophic losses.
“I believe that the options are relatively well defined and the new ideas are going to be helpful. And who knows, maybe the new ideas that are floating around will ultimately end up advising the direction we end up going," Crapo said. "We are going to be getting more ideas from the administration."
He added that while the administration could take steps on its own to recapitalize Fannie Mae and Freddie Mac, such a scenario is unlikely.
Crapo also said that while legislation targeting Dodd-Frank will be a priority, the administration can begin taking steps to tailor regulation without Congress.
“The president in our current structure has immense power through the regulatory process and through influence on appointments and nominations to impact the direction that we face,” said Crapo.
Congress is also planning to take advantage of a little used legislative process called the Congressional Review Act that allows it to roll back recently enacted agency rules. But Crapo stressed that the CRA process also takes five to eight hours of floor time, which limits what can be repealed.