Senate Republicans have blocked the nomination of U.S. Rep. Mel Watt (D-N.C.) to head the Federal Housing Finance Agency. Senate Majority Leader Harry Reid (D-Nev.) and Sen. Tim Johnson (D-S.D.), chairman of the Senate Banking Committee, plan to continue the fight to confirm Watt.
Before the vote, meanwhile, the banking panel held a hearing to discuss plans to overhaul the mortgage finance system. Lawmakers explored whether Congress should adopt a minimum capital buffer for private stakeholders in the mortgage market and how government support would be triggered in times of crisis. The Senate Banking Committee is considering proposals to replace Fannie Mae and Freddie Mac with a federal insurance agency that would regulate and backstop private mortgage market participants.