Carson Sworn In As HUD Secretary
Dr. Ben S. Carson Sr. was officially sworn in as the 17th Secretary of the U.S. Department of Housing and Urban Development (HUD) on Thursday, March 2.
Vice President Mike Pence administered the oath of office, with Secretary Carson’s wife, Candy, and granddaughter Tesora holding the bible.
Secretary Carson will now lead a cabinet agency with approximately 8,000 employees and an annual budget totaling more than $40 billion.
Among Secretary Carson’s first actions in his new role is an ambitious listening tour of select communities and HUD field offices around the country, beginning in his native Detroit, according to a HUD release.
“I am immensely grateful and deeply humbled to take on such an important role in service to the American people,” Carson says in the release. “Working directly with patients and their families for many years taught me that there is a deep relationship between health and housing. I learned that it’s difficult for a child to realize their dreams if he or she doesn’t have a proper place to live, and I’ve seen firsthand how poor housing conditions can rob a person of their potential. I am excited to roll up my sleeves and to get to work.”
Carson previously served for more than 30 years as director of pediatric neurosurgery at the Johns Hopkins Children’s Center. He has received dozens of honors and awards in recognition of his achievements, including the Presidential Medal of Freedom, the nation’s highest civilian honor. He is also a recipient of the Spingarn Medal, which is the highest honor bestowed by the National Association for the Advancement of Colored People.
When Carson was first nominated for the post, some questioned whether he had the appropriate background to lead HUD. In December, shortly after he was nominated, Rep. Elijah Cummings, D-Md., a top Democrat, said Carson is “woefully unqualified” to lead the department and pointed out that he has never worked in the federal government.
Others, however, have pointed out that past HUD secretaries have had little prior experience in the housing market before taking on the role.
In a statement he gave in December in response to the concerns over his qualifications, Carson said, “I feel that I can make a significant contribution, particularly by strengthening communities that are most in need. We have much work to do in enhancing every aspect of our nation and ensuring that our nation’s housing needs are met.”
HUD’s release points out that Carson was “born to a single mother with a third-grade education who worked multiple jobs to support the family.”
In a statement, David Stevens, president and CEO of the Mortgage Bankers Association (MBA), says Carson’s “commitment to bolster America’s real estate markets and assist communities nationwide will serve him well in his new role. [The] MBA looks forward to working with the secretary and his team at HUD to ensure that families all across our country have access to safe, decent and affordable housing.”
Peter Bell, president and CEO of the National Reverse Mortgage Lenders Association, says Carson’s “lifelong commitment to improving the well-being of children and families offers [him] a unique perspective on the housing programs he will oversee in his new position, including FHA’s Home Equity Conversion Mortgage [HECM] program.”
“For nearly three decades, FHA has insured HECM reverse mortgage loans for homeowners aged 62 and older and helped more than a million seniors to age in place,” Bell adds. “We look forward to working with the secretary and his new leadership team in support of the program.”
William E. Brown, president of the National Association of Realtors, says, “Dr. Carson should be proud of his achievement. The task at hand is a big one, and we applaud his commitment to the challenges that lie ahead.
“Homeownership helps build communities and build wealth for families,” Brown adds. “And we know that the policies set in Washington can make a real difference for Americans as they work to realize their dream of homeownership.
“We’re committed to helping them get there, which means addressing the hurdles that buyers, current homeowners and investors face in the marketplace,” he continues. “Housing inventories are tight, and mortgage credit is hard to come by, and at the same time, far too many buyers are saddled with high rents and student debt that stand in the way of saving for a down payment. We look forward to working with Secretary Carson to meet these challenges head on.”
Business As Usual At The CFPB
Will Dodd-Frank be replaced or watered down? And will the Consumer Financial Protection Bureau (CFPB) be abolished as a result? Or will the CFPB live on – only with a different leadership structure, or perhaps with more limited funding, or perhaps less enforcement power? These are the million-dollar questions that everyone in the mortgage industry is asking – and with the Trump administration in the White House, and Democrats ready to fight tooth and nail for what they’ve put in place, predictions galore abound.
Beyond whatever measures the Trump administration and Congress might take, the CFPB also faces significant legal challenges. As of press time, the U.S. Court of Appeals for the District of Columbia Circuit had granted the CFPB’s request to rehear the PHH Mortgage case “en banc,” meaning that the entire court will rehear the case rather than the three judges who ruled in October that the bureau’s single-leadership structure was unconstitutional and, further, that the bureau’s allegations that PHH Mortgage violated RESPA should be tossed.
That means that the earlier decision is vacated – and the CFPB can continue to operate as it did prior to the ruling. It also means that President Trump cannot fire Richard Cordray, director of the bureau, unless it’s “for cause.”
The court has set May 24 as the date for oral arguments.
In rehearing the case, the court is expected to determine whether the CFPB’s structure as a single-director independent agency is consistent with Article II of the U.S. Constitution and, if not, whether the remedy is to sever the for-cause provision of the statute.
More importantly, the court will have to decide whether the issue of the bureau’s leadership structure and the constitutional question it raises should be heard as part of the case.
Meanwhile, there are two bills proposing to dismantle the CFPB now before Congress. In late February, Sen. Ted Cruz, R-Texas, and Rep. John Ratcliffe, R-Texas, introduced a bill that would abolish the CFPB by repealing Title X of the Dodd-Frank Wall Street Reform Act.
In addition, Sen. Mike Rounds, R-S.D., also introduced a bill that would, in effect, render the CFPB powerless by cutting off its funding from the Federal Reserve.
Currently, the CFPB operates as an independent agency and draws funding directly from the Fed. Rounds’ proposal, however, would amend the Consumer Financial Protection Act of 2010 to cut off the CFPB’s funding from the Fed. In addition, the proposal would require the CFPB to turn over all of the money it received in civil penalties to the Treasury Department.
“A product of the ill-advised Dodd-Frank Reform Act, the CFPB is an unaccountable regulatory agency run by unelected bureaucrats, with no oversight from Congress,” Rounds says in a statement. “No unchecked federal agency should have the power to dramatically alter the financial choices of consumers through the rules it promulgates.”
In addition to these two proposals, a separate bill, the Consumer Financial Protection Bureau Accountability Act of 2017, introduced previously by a group of Republican senators, would bring the CFPB under the Congressional appropriations process instead of drawing its money directly from the Fed.
Then there is the Financial CHOICE Act, Rep. Jeb Hensarling’s plan to significantly or completely abolish Dodd-Frank (and, probably along with it, the CFPB), which is reportedly being revamped into “CHOICE Act 2.0,” which tweaks the original proposal and adds more specificity.
According to a recent CNBC report, the revamped CHOICE Act is “more aggressive” than the original version passed by the House Financial Services Committee last fall. The bill proposes to change the leadership structure of the bureau so that its director is a political appointee who can be dismissed “at will,” as opposed to the current structure, which calls for a single director who can only be fired “for cause.” The previous version of the CHOICE Act called for a five-member commission to lead the bureau.
The CNBC report cites a leaked memo that purportedly shows that the bill would strip the CFPB of its authority to bring cases against financial institutions under a provision known as unfair, deceptive and abusive practices. In addition, it would “eliminate databases of consumer complaints,” presumably the CFPB’s controversial consumer complaint database, which bureau officials say they use when deciding where to go and conduct examinations.
Of course, if the bureau ends up being dismantled, the complaint database would presumably go away, anyway. But if the CFPB happens to survive – even with its powers significantly curtailed – there’s plenty of folks in the mortgage industry who would like to see the complaint database eliminated.