Senate Banking Committee OKs Montgomery as FHA Chief

The Senate Banking Committee on Tuesday voted to advance the nomination of Brian Montgomery as commissioner of the Federal Housing Administration, bringing him one step closer to a second stint at the agency.

The 23-member committee gave the OK by an 18-5 margin, with several key Democrats — including banking committee ranking member Sen. Sherrod Brown of Ohio, Sen. Elizabeth Warren of Massachusetts, and Sen. Catherine Cortez Masto of Nevada — voting against Montgomery’s nomination.

The full Senate will now vote on Montgomery’s confirmation.

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The nominee had previously served as FHA commissioner in the George W. Bush administration from 2005 to 2009, and after his government service went on to work for the Collingwood Group, a Washington, D.C.-based housing finance advisory firm.

He had also praised the government-backed reverse mortgage program at length in the past, once quipping that he’d recommend the products to his own mother and overseeing FHA during the introduction of the HECM for Purchase program.

Montgomery faced sharp criticism from some Senate Democrats during his initial hearing back in October, with Warren in particular calling attention to his work as a consultant for some of the same banks he was charged with regulating during his FHA days.

Warren continued those attacks Tuesday, saying after the vote that she hoped the full Senate would reject Montgomery’s nomination.

“FHA needs leaders the American people can trust, not people who let banks get away with defrauding the agency and then making money from those same banks,” Warren said.

Committee chairman Sen. Mike Crapo of Idaho, meanwhile, praised Montgomery’s experience before urging the panel to advance his nomination.

“Brian Montgomery…would once again provide steadfast leadership to FHA as he did a decade ago,” Crapo said.

Brown, meanwhile, was more measured in his criticism of Montgomery, acknowledging the former commissioner’s institutional experience and support for low-income housing. But he, too, voted against his nomination.

“I’m concerned, though, that Mr. Montgomery will, in the interest of making the FHA a better partner to the mortgage industry — many of whom he has served as a board member or advisor — that he will lose sight of the interests of FHA and of consumers,” Brown said.

Brown was echoing Montgomery’s testimony in October, in which the nominee expressed an interest in reducing tensions between regulators and the financial services industry.

“To be clear, fraud and misrepresentation have no place in any industry, much less the one that represents the largest investment most families will ever make — but I wonder if we haven’t gone too far,” Montgomery said. “We must do a better job of providing regulatory clarity to mortgage lenders. It’s time we treat them more like business partners than adversaries.”

Written by Alex Spanko

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