Posted on Friday, December 17, 2010
Last Thursday the Senate held a hearing regarding the nomination of Joseph A. Smith, Jr., to the position of director of the Federal Housing Finance Agency.
Smith gave testimony at the hearing, pledging his commitment to public service and strengthening the nation’s housing finance system.
Smith, who has been the North Carolina Commissioner of Banks for eight years, said he believes conservatorship of Fannie Mae and Freddie Mac cannot be a long-term solution and that he plans on being an active participant in the process of determining the future structure of the housing finance system.
“I understand that, if confirmed, you expect leadership and not just management,” Smith said. “The activities of Fannie Mae and Freddie Mac are national in scope but local in impact, directly affecting communities across the country.”
He continued, “Leadership in this context means determining how to address critical local needs in conjunction with the agency’s duties of conservatorship.”
If selected, Smith will replace Edward DeMarco, who has been acting director of the agency since 2009.
During the hearing Smith underwent a barrage of questions from Alabama Senator Richard Shelby, who asked that Smith submit his answers to those questions in writing at a later date. After, Smith answered questions from Senator Tim Johnson, of South Dakota.
“The director is in a unique position because FHFA is both a conservator and regulator of Fannie Mae and Freddie Mac,” said Johnson. “As conservator, the director is responsible for operations of the entities as well as regulating those operations. How do you plan to balance those roles?”
Smith answered that he believed the two roles were complementary.
“As a regulator,” Smith said, “the agency seeks to ensure that enterprises have proper governance, proper risk management, proper operating procedures, that they obey law, all of these things are consistent with the preservation of their assets, and their rehabilitation. So I think one is an extension of the other. And I think the agency is and will continue to deal with any tension there may be successfully.”
“Would you cooperate with the investigations of the [FHFA] inspector general’s office?” Johnson asked.
“As a matter of course, our activity should be consistent in any event,” Smith answered.
The Senate will meet Tuesday to hold an executive session to consider Smith’s nomination.
I. By: Joy Leopold DSnews