WASHINGTON — Banking Committee Chairman Tim Johnson is pushing for Senate approval as early as this week of a bill that would allow the Federal Housing Administration to raise its mortgage insurance premiums to help bolster its waning capital reserves.
The bill is the same one passed by the House earlier this year.
The FHA Emergency Fiscal Solvency Act would give the agency authority to raise the ceiling on fees the agency charges to insure mortgages. The agency said earlier this year that it no longer had enough capital held in excess to cover projected losses.
Johnson wrote a letter on Thursday to House Financial Services Chairman Spencer Bachus, R-Ala., saying that he would urge colleagues to approve the bill by yearend.
The Dec. 13 letter came on the heels of a Senate banking panel hearing with Housing and Urban Development Secretary Shaun Donovan earlier that week. Donovan said at the time that he hoped the agency would be able to avoid a bailout from the Treasury Department, but could not guarantee it.
"After hearing his testimony and responses to questions from members of the Committee, I have decided that action is necessary before the Congress adjourns for the holidays," the South Dakota Democrat said in the letter, adding that he is "urging" colleagues to waive Senate rules and pass the bill by unanimous consent.
But analysts say the bill could still be held up by those in favor of more sweeping changes to the agency to help it shore up its finances.
"It's absolutely still a risk that this would be held up by Sen. David Vitter, who would like to advance more aggressive FHA reform legislation," said Isaac Boltansky, a policy analyst at Compass Point Research and Trading.
Vitter, R-La., introduced his own bill to overhaul the agency's finances last December.
Boltansky added that the bill doesn't contain several changes that others have pressed for, including a mandated end to the agency's reverse mortgage program and additional mortgage servicing transfer authority.
"This feels like a compromise bill in order to enact legislation that would give the FHA more authority to strengthen its balance sheet," he said. "But the real discussion is going to happen next year."
The bill's chances are unclear. No one on the Democratic caucus has objected to its passing by unanimous consent, but it appears to be held up on the Republican side, according to a Democratic Banking Committee aide.
"Given the urgency of the situation, we remain hopeful that Republicans in the Senate will allow this important legislation to be approved by unanimous consent and send the bill to President Obama to be signed into law before the end of the year," the aide said.