Banking Committee Moves Galante Nomination To Full Senate

With the full support of its Democratic members, the Senate Banking Committee on Tuesday approved Carol J. Galante as assistant Housing and Urban Development secretary and commissioner of the Federal Housing Administration (FHA), moving her confirmation process to a full Senate vote.

However, Republicans on the panel, irked by a lack of progress in reforming Fannie Mae and Freddie Mac and skeptical about the long-term solvency of the FHA, intimated that Galante's path to FHA commissioner will not be an easy one.

While praising Galante as someone who is open to working on the FHA in a "legitimate way," Sen. Bob Corker of Tennessee – the lone Republican to vote for Galante – suggested he would use the full Senate vote as an opportunity to press the Obama administration for direction on the future of the government-sponsored enterprises (GSEs).

‘I'm distressed, frustrated [and] embarrassed that we have not yet dealt with the issue of the GSEs and housing policy as a committee," said Corker. He urged the committee to mark up a GSE reform bill he introduced last month.

Committee Chairman Tim Johnson, D-S.D., said the transition away from the GSEs "must be a gradual one given the current, fragile state of the market."

Corker cast his vote in favor of Galante despite the disapproval of Sen. Jim DeMint, R-S.C., who said he had concerns about Galante's "lack of vision" for the FHA. Mentioning the recent audit report that indicated the FHA is at risk of needing a future bailout, DeMint described the agency as being in "serious trouble."

"I think we need people now in the administration with a sense of urgency about the need to turn things around, reduce our debt, and to avoid further bailouts," DeMint said. "[Galante] does not appear to have that sense of urgency."

In addition to passing the Galante nomination, the committee on Tuesday approved the nominations of Maurice A. Jones as deputy secretary of HUD and former Kansas City Fed President Thomas Hoenig as vice chairman of the Federal Deposit Insurance Corp.

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