WASHINGTON Representative Mel Watt, nominated by President Barack Obama to serve as a top housing regulator, plans to divest bank stock he owns if confirmed in the post, according to a statement filed with the Office of Government Ethics.
Watt, a Democrat from North Carolina, said he would selloff shares that might be seen as posing a conflict of interest if he becomes the head of the Federal Housing Finance Agency. The statement was made available on the ethic agency's website. (Watt's letter: r.reuters.com/saq28t)
FHFA oversees the government-controlled Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), the mortgage financiers that own or back about half of all U.S. home loans.
As the Senate considers Watt's nomination, questions are likely to be raised about campaign donations he has received from some of the nation's largest financial institutions. Bank of America Corp (BA.N), Goldman Sachs Group Inc (GS.N) and Wells Fargo & Co (WFC.N) were among his top 20 contributors in his last election, according to the Center for Responsive Politics. (Watt's disclosure: r.reuters.com/raq28t)
Watt, who has spent two decades in the U.S. House of Representatives, said he would selloff shares of Bank of America, BB&T Corp (BBT.N), M&F Bancorp Inc (MFBP.PK), Deutsche Bank AG (DBKGn.DE)(DB.N) and a real-estate investment trust, all within 90 days of moving into the FHFA role.
The lawmaker's selection was welcomed by most Democrats, housing advocates, liberal and consumer groups, but he will likely need to secure some Republican support as well to win confirmation.
Watt, 67, is a long-time member of the House Financial Services Committee, which oversees Fannie Mae and Freddie Mac. He has pushed for better access to mortgage loans for minority and low-income consumers.
If confirmed, Watt would replace Edward DeMarco, a career civil servant who has led the Federal Housing Finance Agency in an acting capacity since 2009.
Fannie Mae and Freddie Mac were seized by the government in 2008 as mortgage losses mounted. They have received $187.5 billion in taxpayer funds to stay afloat, while paying about $58 billion to the Treasury in dividends.
In a filing that accompanied the statement, Watt disclosed two mortgages from Wells Fargo. One is for a personal residence in Charlotte, North Carolina, and has an interest rate of 2.25 percent. The other is for a Washington home and carries a 3.875 percent rate. The mortgages were listed as being between $250,000 and $500,000.
Among the largest investments Watt listed were shares of Apple Inc (AAPL.O) worth between $50,000 and $100,000, and common stock of Caterpillar Inc (CAT.N) worth between $15,000 and $50,000.
The disclosure forms do not give specific amounts, only ranges.