Debate on the markup of the Protecting American Taxpayers and Homeowners Act, which would eliminate Fannie Mae and Freddie Mac, bordered on combative Tuesday as congressmen from opposing parties talked over each other and quarreled over the bill’s details.
But despite the show, Democrats did not successfully add any amendments to the bill as Republicans on the House Financial Services Committee outnumbered them and consistently voted along party lines.
And after 11 hours of debate, the committee adjourned without a vote, scheduling it for Wednesday when Republicans are expected to pass it.
Although no specific credit union amendments were proposed, such as adding supplemental capital to the bill’s regulatory relief section, credit unions did receive a lot of lip service from both parties, according to NAFCU Vice President of Legislative Affairs Brad Thaler.
“From a credit union perspective, there has been a lot of talk about what impact the bill will have upon community banks and credit unions,” Thaler said Tuesday evening via phone from outside the committee hearing room on Capitol Hill, as the mark up stretched into its eighth hour. “Republicans are talking a lot about Title IV regulatory relief, and the Democrats are talking about concerns regarding secondary market access. So both sides have made a lot of mention of credit unions, just in different context.”
The markup, broadcast live by Internet feed from the committee website, featured spirited debate on topics such as the conforming mortgage loan limit. The bill would reduce conforming limits in high cost areas of the country to $525,000, down from the current limit of $625,500. Rep. Brad Sherman (D-Calif.) proposed an amendment that would strike that section from the bill, saying it was unfair to homeowners in districts such as his in Southern California.
“Ten million Californians live in areas where the median home price is $525,000 or more,” he said. Sherman added that the median home price in Hensarling’s central Texas district is half the median of that in his district, which isn’t the “wealthiest part of Los Angeles.”
Hensarling countered that gradually reducing conforming loan limits in high-cost areas is necessary if reform is to move away from a government dominated housing finance system.
“Five hundred twenty-five thousand dollars is more than double the national median home price of $214,000,” Hensarling said. “I fear that ultimately, this is one more way to preserve the status quo and I would urge a ‘no’ vote on his amendment.”
Indeed, Sherman’s amendment was voted down by the Republican committee majority, but Rep. Michael Capuano (D-Mass.) continued to debate the issue with vocal detractor Rep. Mick Mulvaney (R-S.C.), saying home prices are higher than the national median in California and Massachusetts because of demand.
“Anybody who wants to move into my state should have the ability to move in just like they did in your district,” he said, taking an additional dig at Republicans by questioning their support of free market principles.
Mulvaney then shot back at Capuano, saying it wasn’t demand that drives home prices in California and Massachusetts, but rather, building codes and environmental regulations which make construction expensive. And, he added, home supply is limited in crowded urban areas. The two interrupted each other often during the exchange, forcing Hensarling to intervene.
Conforming loan limits could cause a problem should the bill advance to a full House vote, because Republicans in high-cost districts may oppose it.