Is the GOP platform good for housing finance?

by Ryan Smith21 Jul 2016
The Republican Party platform – passed Monday night at the Republican National Convention – is calling for sweeping and drastic changes to the regulatory environment and the government’s role in housing finance.

“Our goal is to advance responsible home ownership while guarding against the abuses that led to the housing collapse,” the platform states. “We must scale back the federal role in the housing market, promote responsibility on the part of borrowers and lenders, and avoid future taxpayer bailouts.”

The platform calls for reforms that “provide clear and prudent underwriting standards and guidelines on predatory lending and acceptable lending practices.”

The platform also demands a “comprehensive review” of federal regulations “that make it harder and more costly for Americans to rent, buy or sell homes.”

The platform also accused Fannie Mae and Freddie Mac of having a “corrupt business model” that allows shareholders to “reap huge profits” while taxpayers cover any losses.

“The utility of both agencies should be reconsidered as a Republican administration clears away the jumble of subsidies and controls that complicate and distort home-buying,” the platform states.

Republicans also called for changes to the Federal Housing Administration, saying the agency “should no longer support high-income individuals, and the public should not be financially exposed by risks taken by FHA officials.”

The platform also said it would do away with “government mandates that required Fannie Mae, Freddie Mac, and federally-insured banks to satisfy lending quotas to specific groups.”

The party saved most of its wrath for Dodd-Frank in general and the Consumer Financial Protection Bureau in particular.

The CFPB, the platform states, is “deliberately designed to be a rogue agency. It answers to neither Congress nor the executive, has its own guaranteed funding outside the appropriations process, and uses its slush fund to steer settlements to politically favored groups.” The platform also claimed that CFPB Director Richard Cordray “has dictatorial powers unique in the American republic.”

“If the Bureau is not abolished, it should be subjected to congressional appropriation,” the platform states. “In that way, consumer protection in the financial markets can be advanced through measures that are both effective and constitutional.

You can read the entire party platform here.

What do you think of the GOP platform’s stance on housing finance and regulation? Does it go too far? Not far enough? Let us know your thoughts in the comments below.


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