NHC Member Brief: Mnuchin on GSE reform: "Is something I really hope we can work on a bipartisan basis"

Weekly update from the National Housing Conference

April 18, 2019

Member Note I By Tristan Bréaux

Dear Friend,

This year at our Solutions for Housing Communications we held an expert panel entitled, “Communicating on the black homeownership decline and income disparities.” This informative panel included, Lisa Rice of the National Fair Housing Alliance , Hilary O. Shelton of the NAACP Washington Bureau, Cat Goughnour of Prosperity Now and Antoine Thompson of the National Association of Real Estate Brokers. The next day, NHC assembled a group of members to have a first of many strategy sessions on how we work together to increase black homeownership, the one demographic group left behind in the post-recession housing recovery. While there are many barriers that hinder the increase of black homeowners, our Paycheck to Paycheck database shows that affordability is a double edge sword for first time homebuyers. In high cost areas, homes are too expensive; in low cost areas, smaller home loans are not available. When combined with the advent of algorithmic redlining and the experience of equity stripping in the black community , it is clear that these real and complex issues must be addressed as a community, a country and a coalition.

We join in the conversation to shine light on the hard, important and in-depth research that is being done by our fellow advocates and organizations like Urban Institute and the Brookings , as well as generations of advocacy by leaders like the NAACP and the National Urban League , among others. Over the years, in and out of government, I have learned that common problems often require uncommon solutions. This is even more true when the problems are complex and chronic. Building coalitions and consensus that work together toward a common solution is the path to success.

We are committed to working with our diverse group of over 220 members to identify and execute legislative, regulatory, marketing and outreach solutions to address the broad range of issues impacting this issue. Our first meeting, co-chaired by NAREB’s Antoine Thompson identified dozens of factors that require our focused attention. These include but are by no means limited to marketing safe financial products to the black community, dispelling myths that high down payments and perfect credit scores are required to buy a home, working with lenders to earn back the trust of the black community, and addressing the debilitating impact of rising student loan burdens.

As Lisa Rice noted at our panel discussion Tuesday, black homeownership is lower today than it was when segregation was legal before the Fair Housing Act was enacted over 50 years ago. Hilary Shelton made clear that black homeowners were disproportionately hurt by the 2009 financial crisis and black family wealth has suffered as a result. You can hear the entire panel discussion here . While discrimination is clearly embedded into the foundation of the black homeownership gap – and in advertising algorithms today – we also must be cognizant of the fact that historic changes in law and regulation have failed to provide a meaningful and sustainable impact on the homeownership rate. If you are interested in being involved in the conversation, please email me at [email protected] .

Sincerely,

Tristan R. Bréaux

Director, Policy

National Housing Conference

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News from Washington I By Tristan Bréaux and

Quinn Mulholland

UBS taps Hensarling as new Executive Vice Chairman

Yesterday, the investment banking company UBS announced it hired former Representative Jeb Hensarling (R-Texas) as executive vice chairman of the Americas region. Hensarling was first elected to Congress in 2002 and served as the chairman of the House Financial Services Committee from 2013 to 2019 before leaving congress at the end of the last session. During his time as chairman, Hensarling fought to rollback Dodd-Frank and end the federal role in housing finance. Critics of Hensarling’s new job announcement point to his previous efforts of deregulation on behalf of big banks. The move to the financial sector follows in the footsteps of Hensarling’s mentor and former boss, Senator Phil Gramm (R-Texas), who served as vice chairman of UBS from 2002 to 2012.

Members of Congress grill Treasury Secretary Mnuchin

Last Tuesday, Treasury Secretary Steve Mnuchin testified before two different House committees, the House Appropriations Subcommittee on Financial Services and General Government and the House Financial Services Committee. At the Appropriations hearing, Chairman Mike Quigley criticized the Treasury Department’s budget request for, among other things, eliminating funding for the Community Development Financial Institutions Fund. And at the Financial Services hearing, Mnuchin said that GSE reform “is something I really hope we can work on a bipartisan basis” in response to a question from Representative John Rose (R-Tenn.). The House Financial Services Committee also held hearings last week on the Community Reinvestment Act and holding megabanks accountable.

Enterprise vice president pens op-ed on GSE reform

Enterprise Community Partners Vice President for Policy Development Andrew Jakabovics wrote an op-ed for Affordable Housing Finance last week on the issue of housing finance reform. In the op-ed, Jakabovics argued that President Trump’s recent memorandum instructing the Treasury and HUD to come up with a plan for GSE reform could lead to affordable housing getting left behind. “While the president’s memorandum appears to favor leaving many aspects of the current system intact, it has significant potential for damaging housing opportunities for low- and moderate-income communities,” Jakabovics wrote.

Senate disaster aid talks collapse

Senators went on recess last week without having come to an agreement on a relief package for areas impacted by a spate of recent natural disasters. The talks broke down because of President Trump’s refusal to allocate the funding Democrats requested for Puerto Rico to help in its recovery from Hurricane Maria. House Democrats had advanced their own $17.2 billion aid package earlier in the week, but Senators weren’t able to come to an agreement on a Senate bill. Also last week, the New York Times published a report that revealed that HUD does not have a universal policy against paying for housing in a designated flood zone, resulting in many people in federally-subsidized housing that is at risk of flood damage.

Lisa Rice writes op-ed about fair housing

National Fair Housing Alliance CEO Lisa Rice wrote an op-ed for The Hill last week on the 51 ^st anniversary of the Fair Housing Act calling for a renewed commitment to its principles. Rice criticized the Trump administration for rolling back Obama administration rules on disparate impact in housing. “Our work moving forward must include strong enforcement of the Fair Housing Act to bring about the equality and justice that Congress and President Johnson envisioned more than half a century ago in tribute to Dr. King,” Rice wrote. “It is on us to keep that promise alive.”

Yesterday, Lisa moderated a panel on communicating the black homeownership decline and income disparities at Solutions for Housing Communications.

GE fined for role in subprime loan crisis

The National Housing Conference has been defending the American Home since 1931. We believe everyone in America should have equal opportunity to live in a quality, affordable home in a thriving community. NHC convenes and collaborates with our diverse membership and the broader housing and community development sectors to advance our policy, research and communications initiatives to effect positive change at the federal, state and local levels. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.

Defending our American Home since 1931