Senate fails to act on nominee to head Federal Housing Finance Agency

The 111th Congress concluded its work without voting on the administration's nominee to head the Federal Housing Finance Agency, Joseph A. Smith, Jr.

The Obama administration notched a number of victories in the last week of the lame duck session, but in the flurry of activity, the Senate failed to act on the president's pick to head the agency overseeing Fannie Mae and Freddie Mac.

The administration would have to re-nominate Smith for the position when the new Congress is sworn in next year.

Smith, currently the North Carolina Commissioner of Banks, had been cleared by the Senate Banking Committee on Dec. 14 by a 16-6 vote. However, he faced some stringent opposition from Republicans, most notably the committee's ranking minority member, Sen. Richard Shelby (R-Ala.).

Shelby pressed Smith during a nomination hearing about whether he would reject administration pressure to write down mortgages held by Fannie and Freddie if it was not in their best interest economically. Smith responded that in the position he would act first and foremost as conservator of the government-sponsored enterprises.

However, his answer did not win over Shelby, who blasted Smith after the committee's approval, saying he lacked the skills and experience necessary for the position, and again questioning his ability to stand up to the administration.

"We need a watchdog, not a lapdog," he said in a statement.

If he had been approved, Smith would have replaced Edward DeMarco, who has served as acting director of the FHFA since August 2009.

The inaction on the nomination comes as lawmakers are expected to consider reforming Fannie and Freddie next year.

More in Finance

Republicans blast FHFA plan to restart contributions to housing trust fund

Read more »