U.S. GOVERNMENT PUBLISHING OFFICE

32–320 PDF WASHINGTON : 2018

S. HRG. 115–349 

NOMINATIONS OF ELAD ROISMAN, MICHAEL R. 

BRIGHT, RAE OLIVER DAVIS, AND DINO 

FALASCHETTI 

HEARING 

BEFORE THE

COMMITTEE ON 

BANKING, HOUSING, AND URBAN AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

ON 

NOMINATIONS OF: 

ELAD ROISMAN, OF MAINE, TO BE A MEMBER, SECURITIES AND EXCHANGE

COMMISSION

MICHAEL R. BRIGHT, OF THE DISTRICT OF COLUMBIA, TO BE PRESIDENT, 

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

RAE OLIVER DAVIS, OF VIRGINIA, TO BE INSPECTOR GENERAL, DEPARTMENT

OF HOUSING AND URBAN DEVELOPMENT

DINO FALASCHETTI, OF MONTANA, TO BE DIRECTOR, OFFICE OF FINANCIAL

RESEARCH, DEPARTMENT OF THE TREASURY

JULY 24, 2018 

Printed for the use of the Committee on Banking, Housing, and Urban Affairs 

( 

Available at: http://www.govinfo.gov/ 

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS 

MIKE CRAPO, Idaho, Chairman 

RICHARD C. SHELBY, Alabama 

BOB CORKER, Tennessee 

PATRICK J. TOOMEY, Pennsylvania 

DEAN HELLER, Nevada 

TIM SCOTT, South Carolina 

BEN SASSE, Nebraska 

TOM COTTON, Arkansas 

MIKE ROUNDS, South Dakota 

DAVID PERDUE, Georgia 

THOM TILLIS, North Carolina 

JOHN KENNEDY, Louisiana 

JERRY MORAN, Kansas 

SHERROD BROWN, Ohio 

JACK REED, Rhode Island 

ROBERT MENENDEZ, New Jersey 

JON TESTER, Montana 

MARK R. WARNER, Virginia 

ELIZABETH WARREN, Massachusetts 

HEIDI HEITKAMP, North Dakota 

JOE DONNELLY, Indiana 

BRIAN SCHATZ, Hawaii 

CHRIS VAN HOLLEN, Maryland 

CATHERINE CORTEZ MASTO, Nevada 

DOUG JONES, Alabama 

GREGG RICHARD, Staff Director 

MARK POWDEN, Democratic Staff Director 

JONATHAN GOULD, Senior Counsel 

MATT JONES, Counsel 

ELISHA TUKU, Democratic Chief Counsel 

LAURA SWANSON, Democratic Deputy Staff Director 

BETH COOPER, Democratic Professional Staff Member 

MEGAN CHENEY, Democratic Professional Staff Member 

DAWN RATLIFF, Chief Clerk 

CAMERON RICKER, Deputy Clerk 

JAMES GUILIANO, Hearing Clerk 

SHELVIN SIMMONS, IT Director 

JIM CROWELL, Editor 

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C O N T E N T S 

TUESDAY, JULY 24, 2018 

Page 

Opening statement of Chairman Crapo ................................................................. 1 

Prepared statement .......................................................................................... 36 

Opening statements, comments, or prepared statements of: 

Senator Brown .................................................................................................. 3 

NOMINEES 

Elad Roisman, of Maine, to be a Member, Securities and Exchange 

Commission ........................................................................................................... 5 

Prepared statement .......................................................................................... 37 

Biographical sketch of nominee ....................................................................... 38 

Responses to written questions of: 

Senator Brown ........................................................................................... 79 

Senator Menendez ..................................................................................... 79 

Senator Warner ......................................................................................... 80 

Senator Cortez Masto ................................................................................ 81 

Senator Jones ............................................................................................ 83 

Michael R. Bright, of the District of Columbia, to be President, Government 

National Mortgage Association ........................................................................... 6 

Prepared statement .......................................................................................... 46 

Biographical sketch of nominee ....................................................................... 48 

Responses to written questions of: 

Senator Brown ........................................................................................... 84 

Senator Moran ........................................................................................... 88 

Senator Menendez ..................................................................................... 88 

Senator Cortez Masto ................................................................................ 89 

Rae Oliver Davis, of Virginia, to be Inspector General, Department of Housing 

and Urban Development ...................................................................................... 8 

Prepared statement .......................................................................................... 57 

Biographical sketch of nominee ....................................................................... 58 

Responses to written questions of: 

Senator Brown ........................................................................................... 90 

Senator Menendez ..................................................................................... 91 

Senator Warner ......................................................................................... 91 

Senator Cortez Masto ................................................................................ 92 

Dino Falaschetti, of Montana, to be Director, Office of Financial Research, 

Department of the Treasury ................................................................................ 9 

Prepared statement .......................................................................................... 71 

Biographical sketch of nominee ....................................................................... 72 

Responses to written questions of: 

Senator Brown ........................................................................................... 92 

Senator Rounds ......................................................................................... 94 

Senator Reed .............................................................................................. 95 

Senator Cortez Masto ................................................................................ 95 

Senator Jones ............................................................................................ 97 

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

Letter submitted in support of the nomination of Elad Roisman and Dino 

Falaschetti ............................................................................................................ 98 

Letters submitted in support of the nomination of Michael R. Bright ............... 99 

(III)

(1) 

NOMINATIONS OF ELAD ROISMAN, MICHAEL 

R. BRIGHT, RAE OLIVER DAVIS, AND DINO 

FALASCHETTI 

TUESDAY, JULY 24, 2018 

U.S. SENATE, 

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS, 

Washington, DC. 

The Committee met at 10:04 a.m., in room SD–538, Dirksen Senate Office Building, Hon. Mike Crapo, Chairman of the Committee, 

presiding. 

OPENING STATEMENT OF CHAIRMAN MIKE CRAPO 

Chairman CRAPO. The Committee will come to order. I have been 

informed that Senator Brown will be here momentarily, but that it 

is OK for us to go ahead and get started. 

This morning we will consider the nominations of four more individuals to serve in key leadership posts in the Administration: Mr. 

Elad Roisman, to be a Member of the Securities and Exchange 

Commission; Mr. Michael Bright, to be President of the Government National Mortgage Association, or Ginnie Mae; Ms. Rae Oliver Davis, to be Inspector General of the U.S. Department of Housing and Urban Development; and Dr. Dino Falaschetti—did I get 

that right? 

Mr. FALASCHETTI. Yes, sir. 

Chairman CRAPO. To be Director of the Office of Financial Research. 

Welcome to all of you this morning, and congratulations on your 

nominations to these very important offices. I see friends and family behind you today and welcome them here as well. 

Each of these nominees, if confirmed, will play an important role 

in supporting our financial system, ensuring it remains vibrant, 

safe, and sound for all Americans. 

I will start by recognizing Mr. Roisman, in particular, who continues to do outstanding work for this Committee as Chief Counsel. 

I can personally attest to Elad’s impressive command of securities 

law, his keen intellect and work ethic, and his commitment to 

doing what is right. 

As many on this Committee know, Elad is intimately familiar 

with the inner workings of the SEC, having previously served as 

Counsel to Commissioner Daniel Gallagher and as Chief Counsel 

at the NYSE Euronext. 

Elad, thank you for being a trusted adviser and a resource to me 

and to the others on this Committee. If confirmed, I am confident 

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that you will successfully execute the SEC’s mission of protecting 

investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. We will be sad to see you go, but the 

SEC will have gained a tremendous asset from which our whole 

country will benefit. 

Michael Bright also has a distinguished career as a Senate staffer and is no stranger to many in this room. Over the last decade, 

Mr. Bright has established himself as a leading voice on housing 

finance policy. 

Most recently, over the past year-and-a-half, he has overseen all 

aspects of Ginnie Mae, including its nearly $2 trillion portfolio of 

mortgage-backed securities, and has already taken significant action to protect taxpayers and help consumers. 

If confirmed, I know Mr. Bright will continue this important 

work, and I look forward to working with him on opportunities to 

address the last piece of unfinished business from the financial crisis: comprehensive housing finance reform. 

Rae Oliver Davis has dedicated her entire career to holding others accountable. As a former Assistant U.S. Attorney, Ms. Davis 

spent years investigating and prosecuting financial criminals, 

among other crimes. 

Over the past decade, she has turned her focus to holding the 

Government accountable, working for various Inspectors General 

within the United States Postal Service, the Troubled Asset Relief 

Program, or TARP, and HUD. 

If confirmed as HUD Inspector General, Ms. Davis will draw 

from this deep experience, working on behalf of taxpayers to eliminate fraud, waste, and abuse in our housing programs, and to 

make sure that those programs run as efficiently and as effectively 

as possible. 

Dino Falaschetti has had a distinguished career in economics 

that spans academia, the private sector, and public service—most 

recently as Chief Economist for the House Financial Services Committee. 

For many years, Dr. Falaschetti’s expertise on finance, corporate 

law, business strategy, and economic policy has been widely sought 

out. In addition to holding faculty appointments at eight different 

universities, Dr. Falaschetti served as Senior Economist for the 

President’s Council of Economic Advisers during the second Bush 

administration, where he worked directly under future Fed Chairman Ben Bernanke. 

At the Office of Financial Research, or OFR, Dr. Falaschetti will 

be charged with overseeing much of the research and data analysis 

that supports the work of the Financial Stability Oversight Council. If confirmed, he will be a trusted and valued resource for FSOC 

and the Treasury Department as he has been for Congress and 

many others. 

We have four highly qualified nominees before us, and I urge my 

colleagues to support them so that they can quickly get to work for 

the American people. 

Congratulations once again on your nominations, and thank you 

for your willingness to serve. 

Senator Brown. 

3 

OPENING STATEMENT OF SENATOR SHERROD BROWN 

Senator BROWN. Thank you, Mr. Chairman, for holding today’s 

hearing on the nominations of Mr. Elad Roisman, Mr. Michael 

Bright, Ms. Rae Oliver, and Dr. Dino Falaschetti. Welcome to all 

of you. I look forward to meeting your families, and I want to welcome you to the Committee. 

Mr. Roisman has been nominated to be a Commissioner of the 

Securities and Exchange Commission. If confirmed, Mr. Roisman 

would return to the SEC and continue the public service he began 

there. 

His time at the SEC and on the Banking Committee provide him 

with an understanding of the challenges facing the agency and the 

markets. Although I expect Mr. Roisman to face many difficult 

issues, if he is confirmed, I hope he pays particular interest to the 

downward trend in enforcement actions and penalties. That is a serious problem. 

The SEC must emphasize integrity and fairness in the capital 

markets in order for investors to have faith in the markets and in 

the regulator. 

Market participants need to see meaningful efforts by the SEC 

to enforce the law and to punish bad actors. Ten years after the 

financial crisis, we are reminded that regulators have failed to hold 

any senior executives accountable for the widespread misconduct 

that devastated millions of families, and many, many, many of 

those families have not recovered. 

Tough enforcement policies can discourage wrongdoing and 

maybe even help avoid the practices that led to the last crisis. Mr. 

Roisman, I hope you will do everything you can to make strong enforcement a priority. 

Mr. Bright is a fellow Ohioan and is no stranger to this Committee. He advised Senator Corker on Committee issues for 4 

years, including proposals to reshape the housing finance system. 

He has held many roles in the housing finance industry, including his current position as the Executive Vice President and Chief 

Operating Officer of the agency he has been nominated to lead, 

Ginnie Mae. 

For 50 years, Ginnie Mae has facilitated access to affordable 

loans through the FHA, VA, and USDA mortgage programs by connecting federally insured loans to investors around the world. 

Today some 11 million households have access to affordable mortgage credit and rental housing because of Ginnie Mae. 

I have been encouraged that, under Mr. Bright’s leadership, 

Ginnie Mae has strengthened its risk management and continued 

to adjust to an evolving home lending market. 

But I have questions for Mr. Bright about his work and the policies he advocated before his nomination and how this will inform 

his vision for Ginnie Mae. 

HUD’s Office of Inspector General plays an important role in ensuring the integrity and effectiveness of HUD programs. The Inspector General serves as an independent check on the agency, 

working to ensure that HUD’s programs and personnel are accountable to taxpayers and advance the mission that Congress has 

given HUD to assist our families and communities. 

4 

If confirmed, Ms. Oliver would bring years of investigative experience to the role of Inspector General. I look forward to hearing 

her testimony today. 

Dr. Falaschetti has been nominated to be the Director of the Office of Financial Research. OFR was established by the Wall Street 

Reform Act to monitor and study emerging risks to the financial 

system and to support the work of FSOC. 

As both Congress and the regulators make changes to rules that 

roll back the strong post-crisis regulations, the OFR’s analysis of 

market trends and potential gaps in regulators’ view of risks is 

critical to financial stability. 

Dr. Falaschetti, I know you have been a skeptic of regulation in 

the past. If confirmed, I hope you will take OFR’s mandate seriously. Hardworking Americans cannot afford another crisis. Too 

often the White House looks like a retreat for Wall Street executives. All of us on this Committee, at least on this side of the aisle, 

are concerned about that. Whatever OFR can do to monitor risks 

will benefit everyone. 

Not seeing the signs of the next crisis would be bad enough, but 

to miss them because the office created to study systemic risk does 

not have resources it needs is inexcusable. 

Mr. Chairman, I would like to also in closing mention the number of regulators that we have approved—that we have had hearings on and we have approved in this Senate contrasted to the last 

2 years of 2015 and 2016 in the Obama administration. I do not 

lay that at your feet. I lay that at your party’s feet and the Chairman before you. I was speaking yesterday to Governor Brainard, 

saying the only non-Trump nominee, the only non-Trump appointee 

at the Federal Reserve in 18 months because of Republican obstruction, because of Leader McConnell and Chairman Shelby, this 

Committee simply did not do its work, to block every possible 

Obama nominee they could, and we have simply not played that 

role on this side because we, in fact, do believe that the President 

is entitled to his nominations. I would hope that both parties would 

learn something from that. 

Thank you, Mr. Chairman. 

Chairman CRAPO. Thank you, Senator Brown. And I do appreciate the fact that you have been willing to work with us on this 

Committee to move nominees through, and I recognize that as well. 

There has been a serious amount of obstruction on the floor, but 

I do not put that at your feet either. 

We will now administer the oath. Would the witnesses please 

stand? Would you all please raise your right hands? Do you swear 

or affirm that the testimony that you are about to give is the truth, 

the whole truth, and nothing but the truth, so help you God? 

Mr. ROISMAN. I do. 

Mr. BRIGHT. I do. 

Ms. DAVIS. I do. 

Mr. FALASCHETTI. I do. 

Chairman CRAPO. And so you agree to appear and testify before 

any duly constituted committee of the Senate? 

Mr. ROISMAN. I do. 

Mr. BRIGHT. I do. 

Ms. DAVIS. I do. 

5 

Mr. FALASCHETTI. I do. 

Chairman CRAPO. Thank you. You may take your seats. 

Your written statements will be made a part of the record in its 

entirety. Before you begin your statement, I invite you to introduce 

your family, if you choose to do so, and we will proceed in the order 

you were introduced. So, Mr. Roisman, you may proceed. 

TESTIMONY OF ELAD ROISMAN, OF MAINE, TO BE A MEMBER, 

SECURITIES AND EXCHANGE COMMISSION 

Mr. ROISMAN. Chairman Crapo, Ranking Member Brown, and 

Members of the Committee, I am honored to appear before you 

today as the President’s nominee to serve as a Commissioner of the 

U.S. Securities and Exchange Commission. My professional experience as a securities lawyer at a global law firm, a chief counsel at 

NYSE Euronext, counsel to an SEC Commissioner, and now Chief 

Counsel on this Committee have afforded me a broad spectrum of 

experiences that would enable me to effectively serve the public 

and carry out the SEC’s mission should I be confirmed. 

Mr. Chairman, I would like to introduce members of my family 

that are here with me today. My wife, Helaina Roisman, who is a 

social worker at George Washington University Hospital and, without question, my far better half. My parents, Hanna and Yossi 

Roisman, who taught me at an early age the importance of integrity and having the courage to do the right thing. My brother, 

Shalev Roisman, who showed me the importance of trying to understand the other side of every issue. My father- and mother-inlaw, Larry and Laurie Bernstein, and my brother-in-law, Jacob 

Bernstein, who have always been incredibly supportive over the 

years. Last, my daughters, Talia and Yael, are too young to come 

today, but remind me daily of what is most important in this life. 

As the child of two immigrants who moved to this country determined to pursue a better life for themselves and their children, I 

have a strong appreciation for the stability and security that our 

form of Government and financial markets provide. My parents did 

not have much when they came here. But what they did have was 

confidence—confidence in America and confidence in a financial 

system that would enable them to save and invest so that they 

could raise their family and help provide for their children’s education. When I think about what gave them such confidence in a 

system that they barely knew, one thing stands out: public trust. 

While they may not have understood or appreciated the complex 

system of oversight and regulation that governs the conduct of 

market participants in our financial markets, they believed and expected that our markets would be regulated in a fair and orderly 

manner with requisite investor protection, transparency, and accountability. 

While serving as a chief counsel at NYSE Euronext, I saw firsthand the excitement and pride of entrepreneurs and innovators 

when they rung the opening bell as their companies went public, 

enabling them to grow their companies, invest in communities, and 

allow investors to share in their success. My belief in the importance of fair markets and the role they play in our country is what 

motivated me to move from New York to Washington, DC, to join 

the SEC. I wanted to utilize my insights and experiences from the 

6 

private sector and passion for the securities markets to help further the SEC’s important mission. As counsel to an SEC Commissioner, I worked with the SEC’s expert staff and witnessed their 

dedication and determination to protect investors and enforce the 

law. And as a Chief Counsel on this Committee, I have developed 

the utmost respect for this institution and the critical role of congressional oversight. I believe my personal and professional experiences have prepared me well for the role for which I am being considered. I fully recognize and appreciate the critical role the SEC 

serves in the lives of investors so that families like mine can save 

for their children’s education, pay for unexpected expenses, and retire with confidence. 

The U.S. capital markets are the envy of the world, and the importance of the SEC’s role in this cannot be overstated. Throughout 

its history, the dedicated Commissioners and staff of the SEC have 

worked to preserve confidence as our markets grew and evolved. To 

continue this, the SEC must examine and reexamine its rules, regulations, and guidelines to ensure that they are still working as intended to accomplish the SEC’s mission. This is most recently 

manifested in areas such as data protection and cybersecurity, as 

well as the emergence of new investments and technologies such as 

initial coin offerings and blockchain. It is essential that the SEC 

approach these new challenges in a fair and transparent manner, 

provide clarity and certainty to the markets and investors, and enforce the laws and regulations that hold market participants accountable. 

If confirmed, it would be an incredible privilege to rejoin the 

ranks of the SEC’s dedicated public servants and further its mission. 

Thank you, and I look forward to your questions. 

Chairman CRAPO. Thank you. 

Mr. Bright. 

TESTIMONY OF MICHAEL R. BRIGHT, OF THE DISTRICT OF COLUMBIA, TO BE PRESIDENT, GOVERNMENT NATIONAL 

MORTGAGE ASSOCIATION 

Mr. BRIGHT. Chairman Crapo, Ranking Member Brown, and distinguished Members of this Committee, thank you for inviting me 

here today. It is an honor to appear before you as the nominee to 

be the President of the Government National Mortgage Association, 

or Ginnie Mae. 

Let me take a moment to quickly thank my family who is here. 

I am joined by my wife, Maggie, and my son, Mac. My daughter, 

Margaux, who is 5, is at her grandparents’ house in Florida, but 

probably watching on the computer. All three of them have been 

incredibly supportive of me since coming to Washington, and that 

comes despite the many nights of coming home tired, grumpy, and 

distracted with work. I know that I ask a lot of them, and I am 

always thankful for their love and support. 

In addition to being a father, for the past 12 months it has been 

my honor to serve as the Executive Vice President and Chief Operating Officer of Ginnie Mae. I would like to tell you a little about 

what I have learned and what I think still needs to be done. 

7 

Ginnie Mae was created in 1968 when Congress spun off Fannie 

Mae as a Government-sponsored private company and retained 

Ginnie as a complementary Government corporation given the task 

of facilitating the securitization of certain mortgages with an explicit, transparent, and paid-for Government guarantee. Ginnie 

Mae has since evolved into a $2 trillion Government security with 

a focus on facilitating lending to low- and moderate-income, rural, 

urban, and veteran borrowers. 

Today Ginnie Mae’s bond and Ginnie Mae’s brand are globally 

recognized as the most pristine mortgage security in the world. 

This is because of Ginnie Mae’s track record of success and our robust process for ensuring the timely payment of principal and interest to security holders. Ginnie Mae has never missed a payment 

in its 50 years of existence, even during the financial crisis. That 

is exactly what an explicit Government guarantee is meant to provide, and delivering on that mission is what we do at Ginnie every 

single day. 

The day job of managing the roughly 150 employees of Ginnie 

Mae has been an incredibly rewarding experience for me over the 

past year. Ginnie has some of the most dedicated, knowledgeable, 

and mission-focused professionals I have ever worked with. They 

are squarely focused on the challenges of dealing both with 

Ginnie’s growth and the evolving nature of the U.S. mortgage market. 

To address some of these challenges, over the past 12 months we 

have launched a modernization campaign which we call ‘‘Ginnie 

2020,’’ a 3-year strategic plan that will have our data centers running on cutting-edge technology, realign our counterparty risk 

management framework, help bring in additional financing for 

mortgage servicing rights, and expand our investor base through 

outreach and education in dozens of countries around the globe. All 

these efforts are well underway, some are even nearing completion, 

and we are very excited about the promise they hold for the future 

of our organization. 

One issue that I have worked with many of you on this past year 

is that of so-called VA loan churning, or the rapid refinancing of 

VA loans with little or no benefit to the borrower, as well as the 

making of VA loans with interest rates higher than a veteran 

should be getting. I want to specifically thank Senators Tillis and 

Warren for their leadership on this issue. Between the work that 

we have done administratively at Ginnie as well as the language 

recently passed into law, we have taken a major step toward rooting out behavior that was threatening the very viability of the 

Ginnie security, and thereby the viability of the VA, USDA, and 

FHA programs that Ginnie supports. At Ginnie we will not tolerate 

this behavior, and we now know that Congress stands with us. Collectively, our efforts are working. We can already see that in the 

form of a better security price, which directly translates into lower 

rates for FHA, VA, and USDA borrowers. 

I did not begin my career in Washington. I came here after working in my twenties on mortgage trading desks in Los Angeles and 

Charlotte, including through the financial crisis. During that time, 

I learned thousands of lessons that I place into two thematic buckets: 

8 

First, I learned that the mortgage market is incredibly technical 

and enormously complex. I feel honored to be able to use the technical knowledge I gained to serve a broader public policy mission 

that benefits all Americans. 

Second, I learned that greed and unbridled ambition can be dangerous realities, and if left unchecked in the housing market, the 

consequences can be disastrous. I came to Washington in large part 

to help ensure that we never repeat the 2008 financial crisis, and 

I wake up every day with that mindset still. 

I also want to say thank you to the Members and staff that I 

have been privileged to work with in the past, most especially Senator Corker. Working with Senator Corker, as well as Senators 

Warner, Crapo, and others as a staffer was a tremendous honor 

and an experience I still think about every single day. 

Going forward, my main goals for Ginnie Mae are to ensure that 

the agency is well run, and that the agency can continue to serve 

its statutory obligations to help ensure a stable U.S. housing market. There is much to be done, and I look forward to the task. 

Thank you. 

Chairman CRAPO. Thank you. 

Ms. Davis. 

TESTIMONY OF RAE OLIVER DAVIS, OF VIRGINIA, TO BE INSPECTOR GENERAL, DEPARTMENT OF HOUSING AND URBAN 

DEVELOPMENT 

Ms. DAVIS. Thank you, Chairman Crapo, Ranking Member 

Brown, and Members of the Committee. It is an honor to appear 

before you as the nominee to serve as the Inspector General of the 

United States Department of Housing and Urban Development. I 

would like to thank my family, friends, and colleagues—some are 

here today—for their support. I would particularly like to thank my 

parents, Charles and Jerry Oliver, and my husband, Chris Davis, 

for their love and support. I would also like to thank my three stepchildren, Graham, Addy, and Liam, for inviting me into their lives 

and guaranteeing that I would never suffer a dull moment, including some here today as we all prepared to come join you. 

I am proud to have made a career in public service and oversight. As a young staff attorney, I cut my teeth working on the 

then-Senate Governmental Affairs Committee and the House Government Reform and Oversight Committee. I then joined the Tennessee Office of the Attorney General where I led consumer protection investigations that resulted in nationwide settlements with 

Fortune 500 companies. I aspired to be a Federal prosecutor and 

was fortunate to receive an offer with the U.S. Attorney’s Office for 

the Western District of Tennessee in Memphis. I prosecuted a wide 

variety of cases in that office, including false tax claims and investment schemes to firearms and drug violations. 

After returning to our Nation’s capital, I landed in the IG community, where I have happily spent the last decade of my career. 

I have worked in three unique and challenging agencies: the Postal 

Service, the Special Inspector General for the Troubled Asset Relief 

Program, and most recently HUD. I have been boots-on-the-ground 

conducting and leading investigations. I have also served in seniorVerDate Nov 24 2008 11:49 Oct 12, 2018 Jkt 046629 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 L:\HEARINGS 2018\07-24 NOMINATIONS\HEARING\32320.TXT JASON
9 

level positions where I gained an appreciation for the tough decisions that IGs must make every day. 

In my most recent position with the HUD OIG’s Office of Special 

Inquiry, our efforts have focused on senior official misconduct and 

enterprise-level risk to the Department. We have created a multidisciplinary team of attorneys, investigators, and auditors to address complex issues in a comprehensive manner. 

I would like to share with the Committee my personal constitution with respect to IG work and my vision for HUD OIG, if confirmed as Inspector General. 

The foundation of IG work is independence. It is the principle 

that protects our ability to shed light on the truth about Government. An independent IG cannot allow the department or the agency it oversees to direct its work in any way. And an independent 

IG cannot stand for obstruction or delay in agency access to 

records. 

I also believe the best IGs are strong communicators. IGs must 

have solid relationships with their authorizing and appropriating 

committees to ensure they are prioritizing the right work and keeping Congress informed. In my rounds with Senators and your 

staffs, I committed to ensuring that we conduct comprehensive investigations and deliver thorough reporting. I am aware that our 

work is also of significant interest to taxpayers. Shedding light on 

Government mismanagement and misconduct through our reports 

can be as effective as prosecutions and financial recoveries. 

To remain current in our efforts, we must communicate well with 

HUD. We can be independent in the direction of our work and our 

reporting while maintaining strong lines of communication about 

HUD’s priorities, initiatives, and planning. I believe strongly that 

we must also be active in the IG community, through cross-cutting 

initiatives, training programs, and development of best practices. 

My vision and goal-setting for HUD OIG will focus on effectiveness. We can spark positive change by making hard-hitting recommendations relating to HUD’s top management challenges. 

HUD’s mission is far-reaching, and there are many pressing 

issues in HUD programs that require attention. I am honored to 

be considered as the nominee for this important oversight position. 

I appreciate the opportunity to appear before this Committee 

today and to answer your questions. Thank you so much for your 

time. 

Chairman CRAPO. Thank you. 

Dr. Falaschetti. 

TESTIMONY OF DINO FALASCHETTI, OF MONTANA, TO BE DIRECTOR, OFFICE OF FINANCIAL RESEARCH, DEPARTMENT 

OF THE TREASURY 

Mr. FALASCHETTI. Chairman Crapo, Ranking Member Brown, 

and Members of the Committee, it is an honor to appear before you 

as the President’s nominee to serve as Director of the Office of Financial Research. 

I want to introduce my wife, Suzanne, two rows behind me, and 

I want to acknowledge other incredible people who cannot be with 

us today. 

10 

Betty, Suzanne’s Mom, is packing up her home in Chicago for a 

move to Montana. She will be a great constituent for what many 

call ‘‘the last best place.’’ 

My brother, Dominic, and his partner, Greg, are watching on the 

Committee’s website; work in Chicago did not allow them to join 

us today. 

I also want to acknowledge several people who are no longer 

here, but continue to be a great source of love and wisdom: 

Suzanne’s Dad, Rich, as well as my Mom and Dad, Myrna and 

Dominic. 

My parents are the reason I am here. Growing up in South Chicago, my grade school was a tough place. Tough enough that my 

Mom, a substitute teacher, and my Dad, a high school teacher, saw 

early on that I was headed down a dead end. Unfortunately, a better school district looked beyond my parents’ reach. 

Mom and Dad decided to stretch their budget to the end, and 

then more, so that my brother and I could grow up in a much safer 

neighborhood and attend much better schools. They could not have 

pulled it off without the confidence of local bankers who provided 

the support necessary to enable my parents to do what was right 

for their family. 

My high school brought together kids from very different backgrounds. I sat between two young men: one would graduate and go 

on to Yale; the other was already in a gang. 

My experience growing up is a powerful illustration of the importance of a loving family and access to financial services. Absent either one, I could have easily continued down that dead end. With 

them, I was able to earn a business degree and a doctorate in economics that gave me access to a rewarding career. 

My work in business, research, and policy has prepared me to 

lead the Office of Financial Research and ensure that it efficiently 

and effectively provides the high-quality data and analysis that 

Congress intended. It is my upbringing that taught me why this 

mission is so important. 

If confirmed, I look forward to working with this Committee and 

with the other members of the Financial Stability Oversight Council to promote a more resilient financial sector so that all Americans, wherever they might have started, have reliable access to the 

kind of financial hand up that helped my parents realize their 

dreams. 

I am honored to be here today and look forward to addressing 

your questions. 

Chairman CRAPO. Thank you very much. And I also want to 

thank each member of the panel for ending your testimony well 

within your time limits. Impressive. 

I will start with you, Mr. Roisman. While I recognize that the 

Chairman of the SEC sets the agenda for the Commission, can you 

please discuss two or three areas that you intend to focus on personally? 

Mr. ROISMAN. Thank you, Senator. What I would say is I think 

it is important to further the SEC’s mission, and that entails promoting investor confidence in the markets as well as in the SEC 

itself. I have heard from Members of this Committee as well as 

from friends and family who believe that there is a perception that 

11 

the markets are rigged against the little guy, and I think it is important for the SEC to try to dispel that notion. And one of the 

ways they can do that is by having a strong enforcement program, 

a program that holds regulated entities and individuals accountable. 

I also think it is important for the SEC to try and hear from 

folks that may not make it to Washington. There is a large part 

of the country that is represented by small business owners, investors that may not have as much as some of the people—as all people, I should say, or, you know, very rich people. But their perspectives are incredibly important, you know, in determining what the 

SEC is doing right and what it could improve on. 

And, finally, I think I would like to focus on improving capital 

formation and secondary market liquidity for smaller companies. 

Chairman CRAPO. Well, thank you very much. 

And, Mr. Bright, could you go a little bit further into the activities you have been involved in in addressing the churning that has 

been going on with regard to the VA loans? 

Mr. BRIGHT. Yes, thank you, Mr. Chairman. You know, we noticed—I noticed, actually, right when I came on that there was behavior in our security price that was sort of inexplicable. Ginnie 

Mae pricing had fallen for no rational reason, which tells you that 

investors were not buying our bonds. And so we started to dig into 

it and realized that investors were not buying the bonds because 

they were prepaying, meaning they pay some price for the security, 

and then 2 months later they get their par back, you know, get the 

principal back, and lost money on transaction costs and all these 

other things. And so the people were not buying the Ginnie security. If people do not buy the Ginnie Mae security, then you cannot 

make FHA, VA, and USDA loans. So we knew this was existential 

and something we had to go after. 

After we started researching it, we realized that veterans were 

being targeted with very misleading, very deceptive marketing materials, and in some cases they were being duped into refinancing 

their loan three, four, and even five times in a 12-month span. And 

all these refinancings, they were driving up the loan balance of the 

loan; they were causing a lot of consternation in the investors upon 

whom the security relies. And so we knew we needed to get our 

arms around it. 

So we began a dialogue with the CFPB, started sending them 

data, began a dialogue with the SEC as it related to whistleblowers 

who came forth. But, most importantly, we decided that actors who 

had behavior that was not explainable by anything rational would 

not be eligible to participate in our multi-issuer pool. 

So we actually took action and told a few lenders who had pools 

of loans that looked like there was behavior that you could not explain from rates. Borrowers were refinancing even though rates 

were not going down. We said that until you get your act in line 

with sort of your peers, you are not allowed in the multi-issuer 

pool, and it has had a positive effect on our program, which means 

it has had downward pressure on rates for FHA, VA, and USDA 

borrowers. 

Chairman CRAPO. All right. Thank you very much. 

12 

And, Ms. Davis and Dr. Falaschetti, I only have about 90 seconds 

left, so could each of you take about 30 or 45 seconds and just tell 

me a couple of areas you intend to focus on in your new positions? 

Ms. DAVIS. Thank you. I hope to ensure that Americans continue 

to have access to safe and sanitary HUD housing by looking at important issues like lead paint and the circumstances in Alexander 

County. I hope to also conduct effective oversight of disaster relief 

by leveraged our in-house expertise. These disasters are not new to 

the HUD OIG either. And, finally, I hope to ensure that Americans 

have trust in their Government by thoroughly investigating allegations of misconduct at the Department. 

Chairman CRAPO. Thank you. 

Dr. Falaschetti. 

Mr. FALASCHETTI. Thank you, Chairman. If confirmed, my first 

goal is to provide FSOC and its member agencies with the firmly 

grounded and data-driven research they need to evaluate and address risks to financial stability. Fulfilling this goal is important 

for robust economic growth and taxpayer protections. 

My second goal is to build out OFR’s foundational work to 

strengthen market discipline by increasing transparency to financial transactions. Work toward this goal promotes financial stability and strengthened economic growth as well. 

Chairman CRAPO. Thank you very much. 

Senator Brown. 

Senator BROWN. Thank you, Mr. Chairman. 

I want to talk about SEC enforcement. Mr. Roisman, you said 

something that did not exactly disturb me, but maybe piqued my 

interest. You said you wanted part of the role in this job is to dispel 

the notion that the financial system is rigged. That suggests you 

fundamentally believe the system is not rigged in any way. And 

when we see in this country banks making huge profits, getting a 

huge tax cut, especially the financial service industry, executive 

compensation from 2016 to 2017, the CEOs of the largest banks got 

a 22-percent raise on the average, and tellers still make $12.50 an 

hour—maybe a little bit more than that, it has gone up a tiny bit. 

Just as an important Government official trying to dispel the notion the system is not rigged I do not believe is the right way to 

look at that. So we need you to particularly be vigilant to make 

sure the system is not rigged against the middle class and against 

workers, because this Government clearly sings with an upperclass accent, and this Committee has collective amnesia about what 

happened 10 years ago, and it is pretty clear that the rich are 

doing better and better and better in this society, and the 80 percent of the rest of society has been left behind. So if that is not a 

rigged system, it is certainly a fundamental—there are fundamental problems in that system. 

Let me talk, though, about enforcement. We discussed in our 

one-on-one meeting—and I appreciated your coming by—enforcement and the decline in completed cases and penalties. You mentioned individual responsibility. Is the SEC doing enough to hold 

bad actors responsible? 

Mr. ROISMAN. I think it certainly—that is the role of the Enforcement Division, and I think, if I may, I would like to just give you 

13 

the kind of principles I have in terms of what strong enforcement—— 

Senator BROWN. Certainly, but let me ask a question to roll into 

that answer. Are the penalties meaningful enough to deter wrongdoers from violating the law? 

Mr. ROISMAN. I do not know if the actual—I cannot tell you the 

amounts because I just do not have them in front of me. What I 

will say is I think it is important for the SEC, if they have rules 

on the books, to enforce them. You know, each case is on a facts 

and circumstances basis, and it is important to hold individuals 

and regulated entities accountable. 

You know, I agree with what the Chairman has said, which is 

there is no place in our markets for bad actors. 

Senator BROWN. Does the decline in enforcement cases bother 

you? 

Mr. ROISMAN. I do not necessarily gauge the success of the program based on numbers. I think it depends on the type of cases 

and, you know, the impact certainly on recidivism. I would say the 

Commission has been focusing on retail fraud, which is important 

to root out, as well as what I would call ‘‘market integrity cases.’’ 

If confirmed, I look forward to speaking to the staff about what else 

they are focusing on. 

Senator BROWN. I am going to request that the GAO examine the 

reliability and transparency of the SEC’s enforcement statistics. If 

you are confirmed, I hope you will commit to working with Members of this Committee and your fellow Commissioners to ensure 

that the SEC’s enforcement statistics are reliable and transparent 

so we can answer that question that you, understandably now, are 

unable to answer. 

Mr. Bright, welcome, a fellow Ohioan. In testimony before the 

House Financial Services Subcommittee on Housing and Insurance 

in November, almost a year ago, you said you ‘‘definitely were not 

walking away from the paper’’ you coauthored with former FHFA 

Director DeMarco that would greatly expand the role of Ginnie 

Mae. You said you believed in the conclusions in the model even 

more than when the paper was written. 

Do you intend to continue to advance the proposal from your papers, including the proposals outlined in ‘‘Toward a New Secondary 

Mortgage Market’’, as the head of Ginnie Mae? 

Mr. BRIGHT. No. I have a day job. And, in fact, the context of 

that answer was I think they kept asking me about housing finance reform, and I kept trying to talk to them about the day job 

of managing Ginnie Mae and, you know, said, ‘‘Look, I am not 

walking away intellectually from some of the conclusions here, but 

I actually have a day job to manage.’’ 

I will say that, you know, in my day job, as it relates to housing 

finance reform, to have an explicit Government guarantee, if that 

is where policymakers decide to go, you know, one thing I have 

definitely learned in the last year is that you do not just put an 

American eagle stamp on a piece of paper and wave a magic wand 

and how the explicit guarantee works. So to have investors buy it, 

to have investor acceptance, to make sure that that capital is there 

requires a track record and requires an administrative process to 

ensure that P&I moves on time, and that is what Ginnie does. And 

14 

I think that is really the heart of what I am saying in terms of I 

still believe in what Ginnie brings to housing finance reform if and 

when everybody gets to it. But that is not why I am here. 

Senator BROWN. Briefly, Mr. Chairman. So you talked about your 

day job and walking away and you do not abandon your intellectual 

views. Do you still support the elimination of the affordable goals? 

Mr. BRIGHT. For Fannie and Freddie? 

Senator BROWN. The affordable housing goals that this Federal 

Government has stood for. 

Mr. BRIGHT. I do not remember proposing completely getting rid 

of affordable housing goals. I think we have an affordability crisis 

in this country, and I am focused on using Ginnie to address it as 

much as possible. I think housing affordability continues to get 

away from us, and we need to have a comprehensive bipartisan approach to solving that. 

Senator BROWN. But did your proposal not rescind the affordable 

housing goals without requiring that the new system would serve 

at least as many borrowers? 

Mr. BRIGHT. That Ed DeMarco and I wrote? I think it—I know 

it had a Housing Trust Fund and a 10-basis-point strip. I think it 

retained a duty to serve. I think we were vague on the housing 

goals as far as, you know, the quantified way that they are using 

it now. But, I mean, I do not have a strong opinion right now actually on that. I have not thought about that paper in 2 years. 

I believe that I—— 

Senator BROWN. Well, I think you have because that was 9 

months ago that you testified, so you thought about it in November 

2017 when you were asked about it. 

Mr. BRIGHT. Well, listen, I am very focused on using the Ginnie 

Mae platform to support the vital FHA, VA, and USDA programs, 

and any other programs that Congress wants in our security to ensure that all Americans of all incomes and all geographies have access to an affordable mortgage. 

Senator BROWN. And last statement, Mr. Chairman. I apologize. 

You do know this fact that 25 percent of renters in this country 

spend close to or more than half their income on housing—— 

Mr. BRIGHT. Yes, and I think it is a moral failing. 

Senator BROWN. ——and what that means. 

Mr. BRIGHT. I think we have to fix that. 

Senator BROWN. OK. Thank you. 

Chairman CRAPO. Senator Corker. 

Senator CORKER. Thank you, and I thank all of you for your desire to serve our country in your nominated positions. I appreciate 

you being here. 

I am going to focus a little bit on Mr. Bright. I am glad his family is here, and I do appreciate all the public service he has been 

involved in here, and he has worked with many, many people who 

are on this side of the dais. 

You have effectively been running Ginnie Mae for the last year. 

Are there things that you have learned over this last year that, as 

the actual confirmed person, you would be able to overcome in this 

position, whereas over the last year you have been a place holder 

in many ways and not confirmed? 

15 

Mr. BRIGHT. Well, yes. For one thing, when we go global and we 

speak to investors, these are very high level meetings, and it would 

be nice to have the imprimatur of the U.S. Senate to say that they 

continue to support the Ginnie Mae program and they continue to 

have my—you know, I have their support when I go and I speak 

to heads of central banks, large pension funds, and regulators globally who buy our bonds. I mean, that is a big part of the job. I actually did not realize how big a part of the job that was. But the 

blessing of the Senate is a critically important piece of that because 

the fact—how the explicit guarantee works, the fact that it is legislative, it is not through some arrangement, you know, between 

Treasury and some other agency that could change, and that the 

U.S. Senate stands behind it, that does go a long way. So that 

would be very helpful, yes. 

Senator CORKER. During your period of time here, there were 

numbers of attempts to try to do housing finance reform, and, 

again, you worked with people on both sides of the aisle. I know 

you used to convene staffers on both sides of the aisle and worked 

with many in a very constructive way. 

Without getting into the weeds, what was it you learned during 

that process? 

Mr. BRIGHT. Well, I learned, of course, that the market is very 

complicated and that having this Committee do a financial restructuring exercise is a very difficult thing. You know, I would say that 

the bill that we introduced in 2013 was 155 pages. It was the very 

first ever bipartisan comprehensive attempt at housing finance reform. I am proud of that as a starting point. We knew it was a 

starting point. We knew there was a lot that needed to be addressed. A lengthy process was undertaken subsequent, and it did 

not end up in a place that a lot of people liked. I was not part of, 

you know, the subsequent process after introduction, but I am 

proud of where we started. 

I have learned that Senators can get up to speed very quickly on 

the technicals, and I think that that was impressive. But in the 

last 5 years, there are aspects of conservatorship that I think have 

proven a bit more durable than we thought. That does not mean 

it is ideal. That does not mean you all should not do comprehensive 

reform. I think that that is important. But there has not been a 

blow-up, and in 2013 people really were concerned what would happen. And in the last 5 years, I think housing affordability has continued to get away from low- and moderate-income Americans. And 

so if I were redoing the whole thing right now, I would start there. 

Senator CORKER. And then as it goes into the future, assuming 

you are confirmed—and my sense is you will be overwhelmingly— 

what role would Ginnie Mae continue to play in housing finance reform? 

Mr. BRIGHT. If Ginnie Mae is well-run, as I intend for it to be, 

and as it has been for 50 years, the process, as I said earlier, of 

ensuring that the explicit guarantee works, it is not pixie dust and 

a magic wand. It is an administrative process to track the payment 

of principal and interest from lenders through servicers into the 

bond administration platform and out to investors. And if there is 

a hiccup anywhere along the line, since the Federal Government 

has said this thing is guaranteed—in the case of Ginnie, $2 trillion 

16 

worth of bonds—then Ginnie’s responsibility is to make sure that 

any shortfall is made up so that the investor gets their money 

every month on time. It is a very operationally intensive process. 

We do it well, and so I think leveraging those mechanics would be 

a very sensible thing to use going forward. 

The other thing that Ginnie, I have learned, does is we are already written into the investor guides of global investors, so, you 

know, think pension funds in Japan, insurance companies in Germany, you know, they have different risk weightings for Ginnie 

versus other securities. To just stamp, say, you know, conventional 

loans are going to have a guarantee, it would be at least a decadeslong process of going around and explaining to everybody how that 

one would work; whereas, our process is proven in terms of the remittance of P&I and the brand acceptance. So I would advocate for 

leveraging that. And I do think that that is really when I was, you 

know, continuing to stand behind the paper that Ed and I wrote, 

that is something that we learned in between 2013 when we introduced that first bill and now. 

Senator CORKER. And just to close on that note—my time is up, 

but I know there was some ambiguity in the affordable housing 

piece. But the fact is there were more resources than ever going to 

be allocated under both revisions, both bills, both the one in 2013 

and the one that was recently written. There would have been 

more resources toward affordable housing by far than there is 

today. Is that correct? 

Mr. BRIGHT. Yeah, I mean, I hope so. That was the idea. I would 

say that, you know, part of the think tank and legislative process 

is not that you just put your ideals down on paper, like if I had 

a magic wand and could redo the world, this is how I would do it. 

It is trying to say, you know, if someone has this principle but we 

also need to solve this problem, how do you solve it? And these 

were all attempts at doing that. But at its core, I think that continuing to solve affordability is critical, and the interest rate piece 

is only one component of it. We have a lot to solve. 

Senator CORKER. Sorry. I thought I was going to get a ‘‘yes’’ answer. 

Mr. BRIGHT. Yes. 

[Laughter.] 

Chairman CRAPO. Senator Reed. 

Senator REED. Well, thanks very much, Mr. Chairman, and 

thank you all for your willingness to serve. 

Mr. Roisman, we had a very good discussion about cybersecurity, 

which is probably one of the most critical issues we face. As you 

know, along with Senators Collins, Warner, and McCain, I have 

legislation that would have a simple disclosure rule, and I can tell 

you, we would not be offended if you stepped in and by rule at the 

SEC adopted this. So feel free, OK? But, basically, this I think is 

the most serious issue systemwide we are facing. Can you just very 

briefly comment on how critical it is to get something like this disclosure on the books at the SEC? 

Mr. ROISMAN. Thank you, Senator, and thank you and Members 

of this Committee for raising this important issue. I think you have 

held several hearings talking about the importance of cybersecurity 

and the importance of revisiting these esteemed rules that the SEC 

17 

has, whether companies are appropriately disclosing their cyberrisk profiles and risks to investors, and I think it is critical that 

the SEC continue to monitor what the cyberdisclosures are as well 

as the cyberprotections at regulated entities. And if confirmed, I 

look forward to working with you and others to see whether any 

additional changes need to be made. 

Senator REED. Well, I would just point out that there are some 

companies, in fact, many companies that have stepped up. But the 

problem is it is the ones who are not, they are the most vulnerable 

typically or the least aware, and that is where the acts of attack 

usually take place. So I would urge you to have your colleagues 

move more aggressively on this front, in fact, adopt it as a rule before we get around to legislation. That would be very good. 

Mr. Bright, thank you for your service. Back in that 2016 paper, 

you suggested that Ginnie Mae be spun off from HUD independently, which would deny HUD resources that they use for community development block programs. Do you still hold to that position? 

If so, how do we make up the difference in terms of funding? 

Mr. BRIGHT. Thank you. I have actually been surprised at how 

good the working relationship has been between Ginnie and HUD. 

When we had this idea of leveraging the Ginnie Mae brand to operate as the explicit rep, there were a lot of people who said, ‘‘Oh, 

you got to get out of HUD. You got to get out of HUD.’’ These were 

people who had worked at HUD and Ginnie just recently at the 

time. And so we kind of took that as, you know, word and did it. 

I do not think that that was necessary. I think that what is necessary or what would be helpful would be a little bit of additional 

flexibility on Ginnie’s part in terms of how it allocated its salary 

and expense resource. I am not saying more funds. I am just saying 

a little bit of flexibility for—you know, we have some very technical, competent employees who literally leave and go three blocks 

down to FHFA, and that is a problem that we have that we have 

to solve. But we do not need to go as far as we thought we did from 

the outside. 

Senator REED. Thank you. 

Ms. Davis, just let me thank you for your professional service in 

so many different roles and the integrity you bring to your efforts. 

Thank you very much. 

I have limited time. Dr. Falaschetti, OFR was created to be analytical and apolitical, not political and ideological. And you have 

been vested personally as the Director with great independence. 

The language of Dodd–Frank: ‘‘The Director shall have sole discretion in the manner in which the Director fulfills the responsibilities 

and duties and exercises the authorities describe in this subtitle.’’ 

So I wanted to emphasize that to you. 

In fact, frankly, having been here with my colleagues present at 

the creation, as they would say, the hope was that OFR would be 

such a powerful analytical office with the strength to speak truth 

to power that you would be able to tell us where the next crisis is 

coming before it comes, not like 2006 and 2007 and 2008 when we 

found out about it when we read about it in the newspaper. 

So, just quickly, what are the one or two areas you think are the 

weak points right now and that you will explore comprehensively 

when you are there? 

18 

Mr. FALASCHETTI. Well, Senator, thank you for that question, 

and thank you for your work on OFR from the very start. I very 

much appreciate it, and I think it plays an important role in our 

economy. 

If I am confirmed, I can commit to, you know, throughout my career in academics, that is, to have data-driven, firmly grounded 

analytics. You mentioned 2006, for example. We were discussing 

some risks to financial stability at the Council of Economic Advisers in 2006, and I see that as—the fact that—well, there were 

other economists at the time, prominent economists at the time. 

You may recall Raghu Rajan, for example, in the 2005 Jackson 

Hole conference, really, you know, called out what ultimately happened. And so the question is: Why didn’t people listen? And that 

is where I see the power of OFR. It is a central place that is relying 

on firmly grounded research, data-driven. Theory does not always 

give you the answer. You need to look at the data to get those 

kinds of answers. And independent—the research is independent. 

You crafted it to be independent. It is a 6-year term, and it has 

that independence for the research task that it was given. 

Senator REED. Thank you very much. 

Thank you, Mr. Chairman. 

Chairman CRAPO. Thank you. 

Senator Rounds. 

Senator ROUNDS. Thank you, Mr. Chairman. 

Mr. Roisman, first of all, thank you for taking the time to visit 

with me in my office. As you will recall, we discussed the future 

of the fiduciary rule. I believe we both agreed that this rule was 

not originally intended to have been promulgated by the Department of Labor, and the Fifth Circuit Court of Appeals basically 

agreed, vacating the rule in June. 

In April the SEC proposed Regulation Best Interest, its proposal 

to address the fiduciary standard for broker-dealers providing investment advice to retail customers. Can you discuss your views on 

what a proper fiduciary standard should look like? 

Mr. ROISMAN. Thank you, Senator. As you noted, there is a proposed rulemaking, so I have got to be careful just not to prejudge, 

but I would like to try to answer your question as well as I can. 

I think, first of all, it is important for the SEC to have acted, and 

I think it is important also, now that they have a rulemaking out 

there, for interested parties to come meet with staff and Commissioners, and if confirmed, I would look forward to doing that as 

well as reviewing the very lengthy comment file, because they are 

going to be able to tell you what they got right and what could be 

improved. And I think generally it is important to think about 

things, whether the rule is appropriate, things such as ensuring access to financial advice as well as do investors understand the nature of the relationship with the financial service provider, including the conflicts, how those are addressed or mitigated, and obviously investor protection. 

I think another critically important thing to consider is whether 

the rule is business model neutral, meaning that the SEC is not 

picking winners and losers, and preserving investor choice and different types of services for consumers. 

19 

Senator ROUNDS. The concern that many of us had with the fiduciary rule was that in demanding a certain level of professional advice and limitations, it was restricting the number of individuals 

who could actually offer services to clientele with smaller amounts 

of money to invest. Can you talk a little bit about the need for 

those small investors to have access to the equity markets? 

Mr. ROISMAN. I think it is critical, Senator. There is a large discussion about the retirement crisis that is looming, and in many 

areas there is only a set amount of financial services providers, and 

it is important to, you know, maintain the ability for people to get 

access to that. 

Senator ROUNDS. I think that is kind of the critical issue that 

many of us had, isn’t it, the fact that the fiduciary rule made it 

very, very expensive for those individuals with small sums, yet 

very important sums, to be able to get access to the equity markets? Isn’t that really behind a lot of the concern that was expressed with the fiduciary rule? 

Mr. ROISMAN. Yes, I believe so. 

Senator ROUNDS. OK. Thank you. 

Dr. Falaschetti, as you know, the Office of Financial Research, or 

OFR, has been the target of some criticism since its creation as a 

part of Dodd–Frank. The OFR has been accused of undermining 

consumer privacy by collecting data on the financial transactions of 

millions of Americans, being unaccountable to the Treasury and 

the Government as a whole, and not having any notable achievements. 

What do you believe needs to be done to make the OFR perhaps 

more accountable and yet maintain its independence with regard 

to accurate data? 

Mr. FALASCHETTI. Thank you for that question. As you know, the 

staffing levels and the budget is a conversation between the Director and the Treasury Secretary, so that is not independent. What 

is independent is the research—how do you carry out the research 

in service of the FSOC as well as long-term priorities for financial 

stability. 

And in terms of the privacy, you know that OFR has subpoena 

power, for example, and just asking for that information, I mean, 

that is a lot of power. You can just walk in and say, ‘‘We want X, 

Y, and Z.’’ And I think back to when I was in corporate finance and 

financial accounting where we had subsidiaries, we had businesses 

that were very different from each other and had different scales 

and different businesses, and we would see similar problems at 

these various businesses. But we would tailor the solution to their 

business model, and I think that is what needs to be done so that 

we do not create undue costs for financial services. My opening 

statement highlights how important it is for especially young families, community bankers. It is critical for those financial services to 

be affordable, and as you know, the funding for OFR comes from 

the banking sector. 

Senator ROUNDS. Thank you. My time has expired. Thank you, 

Mr. Chairman. 

Chairman CRAPO. Thank you. 

Senator Menendez. 

20 

Senator MENENDEZ. Thank you, Mr. Chairman. Congratulations 

to all of you on your nominations. 

Mr. Roisman, I understand that you served as counsel to former 

Commissioner Gallagher, and I would like to ask you about enforcement. I think we can all agree that the SEC functions best 

with a strong Enforcement Division that stays ahead of the markets. Unfortunately, over the last 18 months, the SEC has taken 

steps to undermine its enforcement capabilities. 

In 2009 former Chair Schapiro expanded the investigative authorities of senior officials in the Enforcement Division, a critical 

post-crisis policy designed to assist the SEC in initiating investigations and going after the bad actors that ravaged investors and our 

economy. 

Last year former Acting Chair Piwowar revoked this substantial 

and investigative authority and limited it to the Director of the Enforcement Division, a decision which Chair Clayton has upheld. 

Since you were at the SEC when this stronger enforcement policy 

was in place, was this policy problematic, in your view? 

Mr. ROISMAN. Thank you, Senator. I am not sure I can answer 

that question since ultimately my role in determining the strength 

of the Enforcement Division was not something I was focused on. 

I did work on reviewing enforcement matters. I think this is just 

a concern folks have had in terms of employees just having the 

ability to issue subpoenas when there may be things like—there is 

an ongoing investigation in another office. So, for example, one of 

the benefits, I think, of having it at the Division Director level is 

they have line of sight into all enforcement cases. So—— 

Senator MENENDEZ. Well, let me ask you this: Do you think that 

the SEC’s enforcement staff abused the rights that they had, the 

investigatory authorities? 

Mr. ROISMAN. I did not see that. 

Senator MENENDEZ. Do you agree with the policy change of revoking investigatory authorities from senior enforcement analyst? 

Mr. ROISMAN. I do not know if I can speak to that. I can say I 

think there is merit in having it at senior officials, and one of the 

reasons I said is they might have line of sight about different enforcement cases. Also, there have been—when you have it at this 

Director level, you have the ability to have people who have issued 

or authorized subpoenas in multiple cases, and they know when it 

is appropriate or not. 

Senator MENENDEZ. Well, that could be done in a senior investigatory—I mean, that is just a procedural safeguard that could be 

institutionalized, right? I am just wondering how limiting the authority to initiate and formalize investigations better protects investors and deters misconduct? 

Mr. ROISMAN. I guess what I would say is, if I am confirmed, 

what I would look forward to is talking to the SEC staff and Commissioners and see if they felt that this has inhibited their ability 

to investigate or bring cases. 

Senator MENENDEZ. Let me ask you this: Senator Akaka and I 

worked to include Section 913 of Dodd–Frank that authorized the 

SEC to require broker-dealers to act in their clients’ best interests. 

In simple terms, after seeing so many hardworking families duped 

into investing in products that lined the pockets of their brokers 

21 

but did little to help them prepare for retirement or send their kids 

to college, we felt it was both common sense and past due time to 

require brokers to put their customers’ interests instead of their 

own. 

Despite a 2011 SEC study recommending a uniform standard of 

conduct for brokers and investment advisers, the SEC’s recent proposal fails to establish a uniform standard of conduct for brokerdealers and investment advisers and puts the burden on the customer to understand the difference between brokers and investment advisers, ignoring the SEC’s own findings. 

So why should customers have to bear the burden of trying to decipher the complex legal relationships to understand whether they 

are making good investment decisions? 

Mr. ROISMAN. So, Senator, I note there is a pending rulemaking, 

and I am going to try to answer your question, but I need to—— 

Senator MENENDEZ. I did not ask you about the rule. I asked you 

about the greater view. 

Mr. ROISMAN. OK. So the greater view in terms of whether there 

should be a fiduciary standard that is uniform for investors? 

Senator MENENDEZ. Yes. 

Mr. ROISMAN. So I think it is important for there to be investor 

choice in different types of services provided to investors, and I 

think it is important for investors to understand the nature of the 

relationship with a financial services provider. And I think one of 

the things that has been talked about in the debate for a long period of time is ensuring that, you know, if there are conflicts, that 

they are addressed. And I think whatever the SEC ultimately does 

or whatever the agency does, I think that is critical. 

Senator MENENDEZ. Mr. Bright, last, housing finance. I read your 

most recent paper on this topic, and I just want to say that reading 

it, to generate funding for affordable home ownership and rental 

options, you propose a 10-basis-point user fee on all mortgages 

securitized in a new system, an idea that others have floated as 

well. But under your proposal, that fee would not even be available 

to support access and affordability until a certain reserve threshold 

had been met. Is that right? 

Mr. BRIGHT. I think that that may have been right. Honestly, I 

have not read it in a couple years. 

Senator MENENDEZ. OK. Well, it is your paper. How long under 

your proposal do you think it would take to meet the threshold requirement? 

Mr. BRIGHT. So I believe that the current regime would have 

stayed in place during this time, and it would have taken maybe 

5 years to build that up, and then the additional funds would start 

kicking in at that point. 

Senator MENENDEZ. Well, some say it takes 10 years under your 

proposal, which would make zero contributions to promote and 

fund affordable home ownership and rental options for a very long 

period of time. So I am not sure if you are still committed to this 

view, but it would be concerning to me, as someone who is concerned about affordable home ownership. 

Mr. BRIGHT. I share your concern about affordable home ownership. I am not in any way here to advocate for anything in that 

paper. I am here to run the Ginnie Mae program so that we can 

22 

continue to support FHA, VA, and USDA programs in as affordable 

a manner as possible. I agree with you we have an affordability crisis in this country. I am your partner in helping to solve that. 

Senator MENENDEZ. Thank you, Mr. Chairman. 

Chairman CRAPO. Senator Kennedy. 

Senator KENNEDY. Thank you, Mr. Chairman. 

Mr. Bright, the National Flood Insurance Program is going to expire July 31st. If Congress allows it to expire, how will that impact 

Ginnie Mae’s ability to guarantee mortgages? 

Mr. BRIGHT. So we saw with the hurricanes last year that if 

properties are not in conveyable condition, then the servicer has 

difficulty filing a claim with the FHA. If and when that were to 

happen en masse, it would put pressure on the issuers. They could 

go insolvent. Then that puts Ginnie Mae at risk. So we certainly 

want and need homes to be conveyable, and if there is an insurance 

problem, which means the servicer and the homeowner had difficulty getting the property into conveyable condition, that absolutely has downstream pressure on Ginnie Mae. 

Senator KENNEDY. If a homeowner is required to carry flood insurance and he declines, Ginnie Mae is not going to guarantee the 

mortgage, is it? 

Mr. BRIGHT. If they are required to? 

Senator KENNEDY. Yes. 

Mr. BRIGHT. Yes, you need to follow all program guides. Those 

are set by the FHA. 

Senator KENNEDY. But Ginnie Mae is not going to guarantee the 

mortgage. 

Mr. BRIGHT. That is correct. 

Senator KENNEDY. How does the FHA and Ginnie Mae ensure 

that flood insurance is kept in effect throughout the life of the 

mortgage? 

Mr. BRIGHT. That is an FHA oversight responsibility, and at the 

time that a claim is filed, the FHA makes sure that everything has 

been in order. 

Senator KENNEDY. They do at the time of the closing, but how 

about on a continuing basis? 

Mr. BRIGHT. Actually, I am sorry. I do not know. I will find out, 

though. 

Senator KENNEDY. OK. Would you and let me know? 

Mr. BRIGHT. Absolutely, sir. 

Senator KENNEDY. I think you are going to find out it is not 

going to be a long exercise. They do nothing. 

Mr. Roisman—am I saying that right? 

Mr. ROISMAN. Yes, sir. 

Senator KENNEDY. You want to be on the SEC. Is that right? 

Mr. ROISMAN. I do, Senator. 

Senator KENNEDY. You are going to regulate the Municipal Securities Rulemaking Board. Is that right? 

Mr. ROISMAN. That is correct, sir. 

Senator KENNEDY. My understanding is the MSRB sort of selfregulates the municipal securities market. 

Mr. ROISMAN. Yes, Senator. 

Senator KENNEDY. OK. Kind of like Congress regulates itself. 

23 

Mr. ROISMAN. Slightly different. The SEC has oversight of all 

self-regulatory organizations, including the MSRB. 

Senator KENNEDY. All right. There are 21 members of the MSRB. 

Eleven of them are supposed to be public members; ten of them 

represent regulated entities. These public members, what does that 

mean? They represent the public, the consumer? Are they consumer advocates? 

Mr. ROISMAN. I apologize, Senator. I am not familiar with their 

rules in terms of how you define ‘‘public.’’ 

Senator KENNEDY. Well, let me tell you the problem, and Senator 

Warner and I have a bill to try to help with this. They are supposed to represent the public, and I am not saying they are not 

good people. I am just saying the whole thing is incestuous. If you 

go look at their resumes, they are all—well, for example, these are 

the folks representing the public. One is a former managing director at Nuveen. The other one is a former executive director at 

JPMorgan. The other one is a former managing director at Artemis 

Capital. Another one is a former head of Vanguard’s long-term municipal bond group. I am not saying they are not good men and 

women. I am just saying they are insiders who are representing 

the public. 

Do you know how the board is picked? 

Mr. ROISMAN. I do not, Senator. 

Senator KENNEDY. I will tell you how it is picked. I am glad you 

asked. 

[Laughter.] 

Senator KENNEDY. They pick themselves. It is a little club. And 

so when they need to add members, they all get together and decide who they want. It needs to be changed. It needs to be fixed. 

These folks regulate the entire municipal securities market. And I 

am not saying they are not all fine people. Some of them are 

friends of mine. Some of them are probably going to be former 

friends of mine. But it is a club, and it is incestuous. And I cannot 

figure out who on the thing really represents consumers. 

How is that for a bill? What do you think about that? Keeping 

in mind you are not confirmed yet. 

[Laughter.] 

Mr. ROISMAN. Given that it may require an SEC rulemaking, I 

do not want to prejudge the issue. But I understand your point, 

and I want to answer your question, which I think it is important 

for investors to have confidence in self-regulatory organizations, 

and this is something that many Commissioners have talked about. 

There needs to be greater accountability and transparency, and I 

am for that. I would be happy to work with whoever is interested 

to kind of further that discussion. 

Senator KENNEDY. OK. Thank you. 

Chairman CRAPO. Senator Tester. 

Senator TESTER. Thank you, Mr. Chairman. Thank you, Ranking 

Member Brown. And, once again, congratulations to all of you for 

your nominations. 

I am going to start with you, Mr. Roisman. This is not a document that you wrote. This is a document that, if you get confirmed, 

one of your fellow SEC Commissioners wrote—Ms. Peirce. The 

piece is entitled, ‘‘Laws against insider trading come with great 

24 

cost,’’ and in that is a quote that says—and I had to read this 

about six times to make sure I was reading what I said from an 

SEC Commissioner, but it said, ‘‘Depriving the markets of the most 

informed traders harms market quality. The stock market would 

look a lot like a lottery if traders possessing nonpublic information 

had to wait for every other trader in the market to acquire the 

same information before trading.’’ 

That was said by an SEC Commissioner that you will serve with 

if you get confirmed. 

Ranking Member Brown talked about your statement about it 

appears that the system is rigged against the little guys. Would 

you agree with Ms. Peirce’s perspective? And I do not want to pitch 

against Ms. Peirce, but it is a pretty amazing thing said by a SEC 

Commissioner, in my book. 

Mr. ROISMAN. Senator, I need to kind of—I do not have the context, and I appreciate hearing it at this time. 

Senator TESTER. Well, basically, let me ask you this: Would you 

agree with the statement that said that traders possessing nonpublic information should not have to wait until every other trader 

in the market for the same information? 

Mr. ROISMAN. I do not want to be technical, but let me try to give 

the quick answer and then the longer answer so I am addressing 

your concern. I think what she was maybe saying is that there 

needs to be a certain duty under insider trading laws when you 

trade. But I think to your point, which I think we can all agree is— 

if people are using material nonpublic information to line their 

pockets at the expense of other investors when there are, you 

know, rules and regulations and laws prohibiting it, it needs to be 

quickly addressed and, you know, appropriate sanctions need to be 

taken. 

Senator TESTER. OK. And people need to be held accountable. 

Mr. ROISMAN. Absolutely. 

Senator TESTER. Would you oppose then any weakening of insider trading rules and regulations? 

Mr. ROISMAN. I would not, Senator. 

Senator TESTER. You would not oppose—— 

Mr. ROISMAN. I would not oppose weakening any insider trading—I would like to keep the insider trading law as vigorous as it 

is. 

Senator TESTER. OK, good. Yes. 

Mr. ROISMAN. I got caught in a double negative. 

Senator TESTER. That is all right. 

[Laughter.] 

Senator TESTER. Wow. That is good. Thank you. 

Mr. Bright, when did you start as Acting Director? 

Mr. BRIGHT. Twelve months ago. 

Senator TESTER. Twelve months ago? When did you bring action 

against the bad actors that you spoke about, the folks that were 

refi’ing veterans and misleading veterans? 

Mr. BRIGHT. We started about 10 months ago. 

Senator TESTER. Ten months ago. So you were on the job for 2 

months. Were the sanctions permanent? 

Mr. BRIGHT. Yes. I mean, the new rules that we have are absolutely permanent, especially now—— 

25 

Senator TESTER. OK. So the actions you took against the bad actors who were charging more than—are permanent. Those guys are 

not going to be allowed in no matter what they do moving forward? 

Mr. BRIGHT. They need to materially completely change their 

business. I mean, they are on the outs, yes. 

Senator TESTER. OK. Thank you. And I would—— 

Mr. BRIGHT. And they are big. 

Senator TESTER. Yeah. That is good. I would just commend you 

in that. Look, Michael, we had a chance to work together when you 

staffed with Corker, and I appreciate what you do, and the fact 

that you were on the job for 2 months and pulled the trigger is a 

very, very good thing. 

Mr. BRIGHT. Thank you, Senator. 

Senator TESTER. Thank you. 

Ms. Oliver Davis, you have an incredibly important role as IG of 

HUD. I guess the first question I have is: Who do you work for as 

IG of HUD? 

Ms. DAVIS. I work for the American people, sir, and I report certainly to the Secretary but without direction and also to the Congress. 

Senator TESTER. OK. And so your independence is something 

that you very, very much respect? 

Ms. DAVIS. Oh, certainly it is. With my 10-year career in the IG 

community, that is all I know. 

Senator TESTER. OK. So if somebody—let me go to a previous 

question here. If you guys were following a course that found that 

folks at HUD were not applying the rules on flood insurance, what 

would you do? 

Ms. DAVIS. Flood insurance. 

Senator TESTER. Flood insurance on loans, if they were required 

and they were not being followed after the fact, do you have the 

ability to do that? 

Ms. DAVIS. Senator, I am going to have to study the flood insurance issue a bit. I will tell you we are always looking for FHA in 

particular with their practices to make sure they are benefiting 

borrowers. We are always looking at the risk management aspect 

of things, too, to make sure that HUD is being a good steward of 

the funds. But I do not have as much familiarity with flood insurance. 

Senator TESTER. It is OK. I think the basic question here is that, 

if Senator Kennedy is correct, and we have lenders out there that 

are required to have flood insurance and they do not, there ought 

to be some sort of watchdog. And it would seem to me it would be 

the IG. 

Ms. DAVIS. I would be happy to look into that, sir, and be a resource to the Committee on this. If there is something that is not 

benefiting borrowers, something that is not being done correctly, or 

if it is not good for the platform, we certainly want to know about 

it. 

Senator TESTER. OK, good. I just want to say thank you all very, 

very much. My time is up. Thank you. 

Chairman CRAPO. Thank you. 

Senator Warren. 

26 

Senator WARREN. Thank you, Mr. Chairman. And thank you to 

the nominees for being here today. 

Mr. Bright, I want to thank you for your work over the last year 

at Ginnie Mae on VA loan refinancing. I sent you a letter last September expressing my concern that certain lenders were pressuring 

veterans to refinance their VA loans over and over, which generates lucrative fees for the lenders but hurts both the veterans 

and the taxpayers who help back up these loans. And in response, 

you set up a task force with the VA. You took quick action to hold 

some of the worst offenders accountable. You also worked with me 

and with Senator Tillis on our bipartisan bill to address this problem. I appreciate that, and I think that is exactly the kind of leadership we need at Ginnie Mae over the long term. And I look forward to supporting your nomination. So thank you for your work. 

I hope you see that it pays off here. 

Mr. BRIGHT. Thank you, Senator. 

Senator WARREN. You bet. 

Mr. Roisman, in my remaining time, I want to ask you about the 

conflicts of interest in the brokerage industry. As you know, these 

conflicts cost American families billions of dollars every year, draining their hard-earned savings. 

Now, in April the SEC proposed a rule that is supposed to address this problem. I have some serious concerns with the proposal, 

and I think it will not come close to eliminating the conflicts that 

hurt American families. I suspect that if I ask you to weigh in on 

the proposal, you are going to do what you just did with Senator 

Tester, and you are going to say you do not want to prejudge the 

issue. So what I am going to do is I am going to ask you some general questions that will help us all get a sense of your views on the 

issue, and I hope we can get some real answers unlike the ridiculous and insulting performance we saw from the CFPB nominee 

last week. 

So let me start here. In certain fields we simply prohibit conflicts 

of interest. If you are on Medicare, your doctor cannot get kickbacks from drug manufacturers in exchange for prescribing their 

drugs. Your lawyer cannot represent the opposing part in a lawsuit. So why should your broker be able to have serious conflicts 

of interest like receiving monetary rewards or other perks for recommending certain investments, even if those investments are not 

in the customer’s best interest? 

Mr. ROISMAN. So I think I view this through the lens of—well, 

first of all, I think the SEC has traditionally been a disclosure 

agency, and one of the things that you try to do is provide information to investors so they can make informed decisions. And I think 

it is important for them to have adequate disclosure and understand the nature of the relationship, including how conflicts of interest exist and how they can be addressed. 

Senator WARREN. Mr. Roisman, that is not my question. My 

question is—it does not make any difference what disclosure you 

give. Your doctor cannot prescribe drugs in order to get kickbacks 

from drug companies. Your lawyer cannot represent a party on the 

other side in order to get double payments. The question I am asking is: Why should your investment adviser be able to get a kickback from a company for recommending a particular product that 

27 

is not the best product for you? I just want to understand why that 

should ever be permitted. 

Mr. ROISMAN. So I would have concerns if someone is providing 

you a product that incentivizes themselves over that of the customer. 

Senator WARREN. You would be concerned. So do you think sometimes they should be able to do it and sometimes not? 

Mr. ROISMAN. I would have to—I would like to speak to the people who, A, receive advice as well as provide it to have a better 

sense of what is actually happening in this space. 

Senator WARREN. Well, we know what is happening in this space. We know that American families are losing more than $17 

billion a year because they are put into products that were not in 

their best interest. That $17 billion kind of sounds like a good 

starting point, and I am still not hearing an argument from you 

about why that should ever be permitted. 

You know, in 2013 the SEC put out a study on investment advice 

that said, ‘‘In the interest of increasing investor protection and reducing investor confusion, the staff recommends that both brokerdealers and investment advisers should be held to a uniform fiduciary standard.’’ A fiduciary standard, as you know, would require 

brokers to owe a duty of loyalty to their clients, meaning they do 

not get to put themselves first, no conflicts of interest. 

Do you agree or disagree with that recommendation of the SEC 

staff? 

Mr. ROISMAN. So I am familiar with the recommendation. I am 

also familiar with some of the—it was not an universally agreed 

upon view regarding that report or recommendation by the SEC 

Commissioners at the time. In fact, I think the—— 

Senator WARREN. I am not asking you how many other people 

agreed or disagreed. I am asking if you agree or disagree. 

Mr. ROISMAN. Sure. 

Senator WARREN. You are the one who is trying to get this job. 

Mr. ROISMAN. Agreed, and I am going to try to answer again. 

This does kind of feed into the proposed rulemaking, and I am 

keeping an open mind. But what I do think is important is part 

of what the SEC staff even acknowledged in the report was that 

there was investor confusion, and it is important to maintain access to financial advice for most people. 

I know this is something you care passionately about, and you 

have talked about raising the bar so everyone has the same obligations to it. The concern I have had is, you know, first of all, I think 

the system currently works where we can all acknowledge—at least 

I hope we can acknowledge the amount of people who are doing 

wrong is small. We need to get them out, but it is not an entire 

industry. 

Senator WARREN. The dollar damage we can also acknowledge is 

somewhere north of $17 billion every single year. I think there are 

a lot of American consumers who would not call that ‘‘small.’’ 

Your witness is going long here, Mr. Chairman. I just—look, I 

just want to make the point here. The SEC has a proposal that is 

not tackling the central problem, and the central problem is nobody 

should be allowed when they are a broker to put their own interests ahead of the interests of the client. That is bad, and it is bad 

28 

for American consumers. And the notion that somehow, oh, there 

will be a disclosure back on page 5 buried in fine print and tangled 

up in legalese and somehow people waived it does not work. And 

we know it does not work. And in other areas, we just say, ‘‘You 

do not get to do that.’’ We do not get to say, ‘‘If you have got good 

lawyers, you can do it.’’ We say you flatly do not get to do it. That 

is the position I want to see the SEC in. Your job is not to take 

care of the cheaters. It is supposed to be to take care of American 

investors. 

Chairman CRAPO. Senator Shelby. 

Senator SHELBY. Thank you, Mr. Chairman. 

First, I want to thank Mr. Roisman for his service to this Committee. When I was Chairman of the Committee, he came on. He 

served the Committee, I thought, and the Nation well. Under the 

chairmanship of Senator Crapo, he has now become the Chief 

Counsel of this Committee, which is an honor in itself and shows 

a lot of respect and also a lot of confidence by the Chairman and 

other Members of the Committee. You have a wonderful background, education, and experience before you came here. 

I am here to support all of the nominees. I have some questions, 

Mr. Roisman, and I will start with you. I have believed always that 

our financial regulators should conduct thorough cost-benefit analysis when writing rules. What is your view on that, not just the 

Securities and Exchange Commission but the Federal Reserve, the 

FDIC, and so forth? What is your view? 

Mr. ROISMAN. Thank you, Senator. I think cost-benefit analysis 

is a critical tool for all agencies. It enables them to determine what 

the costs and benefits of every rule are and then hopefully tailor 

to maximize benefits and minimize costs. It also provides an ability 

for the general public to have an understanding of how the agency 

came to its conclusion, thereby, you know, able to question the assumptions or conclusions and improving the overall rule. In many 

ways this is just what we were asked in math class to do, which 

is show our work. 

Senator SHELBY. What ways could some of these rules, cost-benefit rules, be implemented by the Securities and Exchange Commission, assuming you are confirmed and a member of the Commission? 

Mr. ROISMAN. So if confirmed, I look forward to working with the 

Division of Economic Analysis to see what could be improved. 

There are several Commissioners, Commissioners Peirce and Jackson, who have already talked about the importance of that division 

and the data that it provides, and I think as the SEC goes forward 

on rulemakings, it is important for them to continue to have a robust economic analysis. 

Senator SHELBY. Your background, Mr. Roisman, you are an expert in securities law. Once confirmed, what will your priorities be 

as a Commissioner? And in what ways do you believe our capital 

markets can be strengthened to make it better and access to everybody? 

Mr. ROISMAN. I would say some of the priorities would be furthering the SEC’s mission, promoting investor confidence both in 

the markets and in the SEC. In terms of capital formation, I would 

look to see how we can promote responsible capital formation and 

29 

improving the secondary market liquidity for smaller companies 

and less liquid stocks. And what I said, I think a little inarticulately, previously what I tried to say was it is important for the 

SEC to hear from folks that may not make it to Washington, and 

they provide a valuable perspective on what the SEC is doing right 

and what could be improved. And things like the Small Business 

Advocate, which, you know, Congress passed and I hope will be 

filled very soon, will serve a critical role in that. 

Senator SHELBY. Have you thought about what ways the SEC 

could make it easier for small- and medium-size business to access 

capital? Which I think is so important for job growth in this country. 

Mr. ROISMAN. I think it is important—so there have been a few 

studies and roundtables that the SEC has conducted about this, 

and I think it is important for the SEC to actually, as I said, go 

out there to States and talk to the folks who are trying to build 

their businesses. But I think, you know, potentially looking at 

things like reviewing crowdfunding and Reg A offerings and things 

that, you know, lend themselves to smaller companies would be 

very helpful. 

Senator SHELBY. I will shift a little bit to Mr. Bright. Mr. Bright, 

you also have great experience in the private sector as well as the 

Government. What do you think will be your biggest challenge as 

President of Ginnie Mae? 

Mr. BRIGHT. Thank you for the question. I think that it is possible that—you know, this credit cycle objectively has been running 

for a long time. Credit cycles do not run forever. So since I am paid 

to worry, the thing that I worry about is that the credit cycle run 

its course at a time when interest rates have already bottomed out 

and hit historical lows and so interest rates start to creep up. If 

both of those things happen at the same time, it could put a substantial amount of liquidity stress on our issuer base, especially 

nonbank issuers. I think nonbanks—— 

Senator SHELBY. Explain what you mean by this. 

Mr. BRIGHT. In the Ginnie program, the issuer is a nonbank company. They are responsible for making principal and interest even 

if the borrower does not until they file a claim with the FHA. There 

is a multiple-year lag sometimes there. In that case they have to 

have liquidity to refund the P&I, and if they cannot, Ginnie has to 

step in on their behalf. 

Historically, when delinquencies go up, interest rates come down, 

and so you have a little bit of stress on the servicing side as a company. But you make up for it with some revenue from new originations, because you have kind of a refi boom. I think we could be 

entering a period where that is not the dynamic that we have, 

where you could have a little bit of stress in the rate in the form 

of higher delinquencies, but you do not have this refinance opportunity to generate a bunch of revenue. And we need to make sure 

that our issuers can withstand that type of stress. 

Senator SHELBY. Would you just explain to the Committee and 

the people the difference, if any, between Freddie Mac, Fannie 

Mae, and Ginnie Mae? And are you competing in the market for 

similar stuff? 

30 

Mr. BRIGHT. I do not look at it as a competition for market share 

at all, to be clear on that. Ginnie is an explicit Government agency 

that actually has a complementary but different role in some ways 

than what Fannie and Freddie do. Fannie and Freddie are master 

servicers. They are issuers of their own security. They do bond administration for their own security. And they do not have an explicit guarantee. They have a PSPA with Treasury. We oversee 

with an explicit backing of the Federal Government the process of 

making sure that P&I moves where—— 

Senator SHELBY. Explicit backing, isn’t it? 

Mr. BRIGHT. Explicit backing. 

Senator SHELBY. As opposed to implicit. 

Mr. BRIGHT. That is correct. 

Senator SHELBY. And what is the size of your portfolio? 

Mr. BRIGHT. Two trillion dollars. 

Senator SHELBY. Two trillion dollars. Do you feel confident that 

the portfolio is in pretty good shape right now? 

Mr. BRIGHT. Well, I never let myself feel confident about anything. I am supposed to worry, so I do. But we are building a lot 

of infrastructure right now to keep up with the pace of growth, and 

I know that these are the right tools to be building. So we are 

doing a lot of monitoring on all of our issuer base. We are doing 

a lot of technology modernization. We are doing a lot of outreach. 

We are instituting stress testing; we are instituting living will requirements. These are a little bit different than the banks, but 

similar analogy. We are instituted a new risk committee. We are 

after this as much as we can. 

Senator SHELBY. Thank you. 

Thank you, Mr. Chairman. 

Chairman CRAPO. Senator Heitkamp. 

Senator HEITKAMP. Thank you. Michael, there is no way denying 

that that is your son, by the way. 

[Laughter.] 

Senator HEITKAMP. He looks just like you. He is even more handsome because he has red hair. 

[Laughter.] 

Mr. BRIGHT. Has he been quiet? 

Senator HEITKAMP. But you are boring him, I have to tell you. 

He has been rolling his eyes and putting his head down. But I just 

want your son to know what an important job his Dad is applying 

for and what a good job he has done so far. 

I want to build on Senator Shelby’s line of reasoning on nonbank 

mortgages. Obviously the IG has issued a report that concludes 

that Ginnie has not done enough to respond to the changes in its 

issuer base. Just to give the context of this, in 2013 banks originated 70 percent of all new mortgages. This year nonbanks issued 

60 percent, and you see the ads over and over and over again. 

Mr. BRIGHT. Yes. 

Senator HEITKAMP. So we are really concerned about how that— 

you talk about things that you should worry about. I think this is 

something you should worry about. 

So I just have a couple questions, maybe more open-ended than 

what they should be, but, number one, do you have enough resources to conduct oversight? In terms of volume, do you feel conVerDate Nov 24 2008 11:49 Oct 12, 2018 Jkt 046629 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 L:\HEARINGS 2018\07-24 NOMINATIONS\HEARING\32320.TXT JASON
31 

fident that you are properly equipped to handle a portfolio that is 

three times larger than it was in 2007? And what additional resources, if any, would you recommend in order for Ginnie to more 

effectively carry out its oversight, especially in the context that 

Senator Shelby just talked about, which is that this is an explicit 

guarantee? 

Mr. BRIGHT. That is right. Thank you very much. So the number 

one challenge that I have in managing these employees is that we 

have a pay scale and a hiring process that is different than similar 

regulators and different than Fannie and Freddie. 

Senator HEITKAMP. How do you fix that? 

Mr. BRIGHT. We need a legislative solution. So we are in law required to—you know, we have limitations on compensation. Our 

funds are appropriated, but we can work with that. It is just that 

we have very talented, technically skilled employees who can go 

three blocks down to the street to the FHFA for $40,000, $50,000 

more, and that has happened three times since I was senior manager, since I got here. They can go to Fannie or Freddie, which is 

a totally different set of compensation scales. They can go to the 

OCC, they can go to the Fed, who also has MSR risk management 

oversight. 

So these are technical skills, and I have no ability to kind of reward and retain that type of talent. 

Senator HEITKAMP. So that is one thing that we could do, is help 

you retain talent. What else are you going to do to buildup the expertise in the agency? 

Mr. BRIGHT. So we procured a few contracts to begin the process 

of stress testing our issuers. The procurement process is lengthy. 

Again, other regulators with similar challenges have some freedoms that we do not have. I am talking about, you know, just getting all the approvals and that process itself. It takes a little bit 

longer as a pure Government agency to do that. So there are some 

legislative solutions, if you are interested, that I would be happy 

to share on that. 

I do want to say that the Ginnie folks are incredibly talented and 

dedicated. 

Senator HEITKAMP. I do not think anyone should take any of 

your comments here to mean that you are working with people who 

are subpar. 

Mr. BRIGHT. Thank you. 

Senator HEITKAMP. I want to just share Elizabeth’s support. I 

think you have done a great job since you have been there. We are 

grateful that you are willing to take this on. 

Mr. Roisman, one of the things that we have worked on over the 

years has been small business, and you know that I feel very 

strongly about small business advisory within that securities 

frame. And I think you mentioned in your comments the Small 

Business Advocacy Act. We have yet to get a nominee. What can 

you do to help us to make that happen, assuming you are confirmed? 

Mr. ROISMAN. Thank you, Senator. I think it is a critically important position at the SEC, and you have said it before and I agree 

with it. There is a potential for them to be too small to succeed. 

I personally hope that the position will be filled by the time I am 

32 

confirmed. But if it is not, I would be happy to work to try to get 

that filled as expeditiously as possible. 

Senator HEITKAMP. In Fargo, for example, about a third of our 

startups identify accessing early stage funding as the greatest hurdle. We have a bill that hopefully within SBA would help get that 

done. But I think it is critical that you look not only at small business, but you look at small rural business. And so can I have your 

commitment that when you move over there, this will be a particular interest of yours and that we can call on you to make sure 

small businesses are being heard within the SEC? 

Mr. ROISMAN. I am happy to commit to that. 

Senator HEITKAMP. Thank you. 

Thank you, Mr. Chairman. 

Chairman CRAPO. Thank you. And you made it under time, too. 

Senator HEITKAMP. That can make up for last week. 

Chairman CRAPO. Senator Tillis. You should not have reminded 

me. 

[Laughter.] 

Senator TILLIS. Thank you, Mr. Chairman. I may add that you 

can tell that these folks have experience on the Hill because, because of you all, I am getting to ask my questions 4 minutes early. 

I counted about 4 minutes that you all yielded back in your opening statements, so I appreciate that. 

Before I get started, Mr. Chair, I want to thank my staff, Tyler 

Williams here, who is moving on to a new job in the Department 

of Treasury, the domestic finance team. He has been great to work 

with. I know he has developed a great relationship with the Committee staff, working with Senator Warren on the bill that she 

mentioned earlier. So I just want to personally thank him for his 

contribution. Thank you. 

Chairman CRAPO. Congratulations. 

[Applause.] 

Senator TILLIS. Mr. Roisman, it looked like you wanted to finish 

the answer to Senator Warren on a sort of concept that everybody 

is a bad actor versus what I think you were trying to get at, is you 

want to go after the ones that we need to focus on most so we get 

the resources, get the lead on target, so to speak. Do you want to 

finish your thought on that? 

Mr. ROISMAN. I think you encapsulate it perfectly. I also think 

what I think is important is this all does tie in, you know, toward 

the proposed rulemaking that the SEC is doing. And I think it is 

important for the public to comment on this issue. She raises an 

important issue, which is: Do people think that the current differentiation of standards is appropriate? And this is one where the 

SEC needs to look at the comment file and meet with people and 

see what they got right and what could be improved. I think it is 

a good first step, but I look forward, if confirmed, to keeping an 

open mind and seeing if there are any changes that are necessary. 

But I appreciate the opportunity. 

Senator TILLIS. Thank you, and I also thank you for the work 

that you have done on the Committee. You have got a great reputation, and I know you are going to serve us well in a new capacity. 

Mr. Bright, you may be one of the calmest worriers I have ever 

seen. But I thank you for the time that you spent in our office talkVerDate Nov 24 2008 11:49 Oct 12, 2018 Jkt 046629 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 L:\HEARINGS 2018\07-24 NOMINATIONS\HEARING\32320.TXT JASON
33 

ing about how we could address a portion of your portfolio that was 

worrisome to you. With the passage of the bill, can you tell me a 

little bit about any of the immediate positive impacts it has had or 

what it is going to look like a year from now? 

Mr. BRIGHT. Well, so strictly speaking from a purely antiseptic 

perspective, the securities are trading better in price, which means 

lower rates for FHA, VA, and USDA borrowers. And so our securities have improved about a point in price, which means a 25-basispoint, all else equal, lower borrowing rate for all the programs that 

Ginnie supports. So that is obviously a win. 

In the nonantiseptic space, my hope is that it is a signal that, 

you know, these borrowers are not, you know, there to be refinanced when they do not need it. That is not going to be tolerated. 

It is going to show up in the data somewhere, and we are not going 

to be OK with that. 

Senator TILLIS. This was a pretty narrowly crafted bill. I always 

wonder anytime you pass a bill if you see any potential unintended 

consequences or other things we should look at or maybe a followon phase. Do you have any opinions on whether or not there are 

any areas that industry has expressed a concern? 

Mr. BRIGHT. I think it was very—first of all, I think the provisions were exceptionally helpful. I think saying that Congress 

stands with us leads us so that we are not kind of hanging out on 

a limb. We know we have the political support we need to go after 

this problem. 

There was a slight difference, I think, in some of the wording 

that ended up meaning that we had put in place a reg in December 

that was a 6-month seasoning requirement, and the bill codified 

that reg. The way the bill was written, the codification I think 

ended up being a little bit more like a 7-month seasoning. So if you 

wanted to perfectly align the language with the reg that we have, 

that would be a quick sort of technical fix. But it is working, writ 

large, at a macro level for sure. 

Senator TILLIS. What about other priorities moving forward in 

terms of congressional priorities? 

Mr. BRIGHT. A few folks have asked me, you know, what hamstrings Ginnie Mae, what resources we need, and as I have pointed 

out, we do lost talented employees to agencies in Washington, DC, 

that can compensate on a different scale. So that would require a 

legislative fix. If there is interest on that, as Ginnie has gotten 

very, very big, I would have great interest in working with you on 

looking for something that works. 

Senator TILLIS. Thank you. We look forward to working with you. 

I am going to yield back the remainder of my time. I congratulate all the nominees and their families for the great job you have 

done on the Hill and the great job you will do in your new roles. 

Thank you. 

Chairman CRAPO. Senator Cortez Masto. 

Senator CORTEZ MASTO. Thank you. Welcome and congratulations to all of you as well, and welcome to your families. 

Mr. Bright, let me start with you. I understand from 2002 to 

2006 that you were a senior financial analyst and trader at Countrywide where you were responsible for modeling the value of mortgage servicing rights and hedging interest rate risk. Is that correct? 

34 

Mr. BRIGHT. That is correct. 

Senator CORTEZ MASTO. And then from 2006 to 2008, you worked 

as an associate at Wachovia, where you worked in MBS trading. 

Is that correct? 

Mr. BRIGHT. That is correct. 

Senator CORTEZ MASTO. So can I ask you—I represent the State 

of Nevada, and obviously in 2007 we had the worst crisis we had 

ever seen and the recession. Can I ask you that during your time 

at Countrywide or Wachovia, during that time or after, did you 

raise any alarm bells about risky and abusive practices? 

Mr. BRIGHT. Yes. And, in fact, I quit Countrywide in 2006 because my wife and I decided that this was going to go under, that 

the behavior that we were seeing was unethical, unsustainable, 

that this was a bubble that was going to collapse. We wanted to 

get as far away from it as we could. 

Senator CORTEZ MASTO. Were you vocal about it to others as 

well, or regulators, to let them know about the risky practices and 

things—— 

Mr. BRIGHT. Well, there was nothing to whistleblow in the sense 

of something illegal being done, but, yes, I was very vocal internally at Countrywide that I thought these ‘‘Pick-a-Pay’s’’ were a 

terrible, terrible product. 

Senator CORTEZ MASTO. Then you went to work at PennyMac. Is 

that right? 

Mr. BRIGHT. After. 

Senator CORTEZ MASTO. And correct me if I am wrong. Was 

PennyMac a reincarnated version of Countrywide run by the same 

management? 

Mr. BRIGHT. The managers there were managers who were also 

pushed out in 2006 and 2007. 

Senator CORTEZ MASTO. They were pushed out of Countrywide? 

Mr. BRIGHT. That is correct. There was a total split in the—first 

of all, I was an analyst. I spent my first couple years doing analyst 

type work. By the time I was, you know, smart enough to understand what was going on and realized that this thing was wrong, 

you could see that the company was splitting. You know, I am not 

in the C-suite. I am down in the, you know, bowels there. But the 

rumors are trickling. And you could see that the senior management was splitting, and some people were saying, ‘‘This cannot go 

on. We have got to stop.’’ And a lot of those folks were pushed out 

by the folks who won the day at the institution, at Countrywide, 

that said that is not right, keep going, keep hitting your EPS targets, keep going after more and more. And, you know, Stan, who 

was the CEO of PennyMac, was absolutely one of those folks. I was 

one of those people. And so there was a little bit of internal kind 

of tension. If I had seen anything illegal, of course, I would have 

flagged it. It was more the subjective, ‘‘Do people know what this 

Pick-a-Pay thing means?’’ You know, the sales folks were saying 

yes, and I was saying no, and so I left. 

I went to Wachovia, and the very first meeting I had at 

Wachovia, I told them, ‘‘This is a terrible product. Stay away from 

it.’’ Because they kind of wanted this Countrywide download, because everybody was trying to be as big as possible. 

35 

A month after I was there, they bought Golden West, and that 

was it. That was the beginning of the end. The stock price went 

down. I lost my job in 2008. I did not lose any money. I did not 

get a golden parachute. I had been saying, ‘‘Do not do it.’’ But it 

was just a failing on every level. 

Senator CORTEZ MASTO. So what have you learned that you carry 

with you today? And what will you carry with you from that as 

President of Ginnie Mae? 

Mr. BRIGHT. That if you—a lot of things. If you make T-shirts 

and you are very ambitious and you are greedy and you make Tshirts and your T-shirts do not work out, then the world is stuck 

with a bunch of bad T-shirts. If you are in the housing market and 

you are greedy and you are irrational with your ambition and you 

are not thinking about the fact that you are operating in an ecosystem where the Government is playing a large public policy role 

because we have deemed it as important to play this policy role— 

you do not take that serious, then the ramifications of the mistakes 

are catastrophic and they float around the globe, both economically 

and politically, and we are still living with that now. 

And so everybody in this market, in that mortgage market, needs 

to take seriously, in my view, the fact that they have signed up for 

something where this body has created a large role for Government, for public policy achievement, and we have to take that seriously. And so I want to fulfill that mission in my role at Ginnie, 

and I think that the industry needs to consistently do that introspection and self-reflection. 

Senator CORTEZ MASTO. Thank you. And so can I get your commitment that lenders participating in the programs through Ginnie 

Mae will be appropriately scrutinized under your leadership? 

Mr. BRIGHT. Absolutely. 

Senator CORTEZ MASTO. Thank you. 

I notice my time is up. I have got about 20 seconds left, not 

enough time to go into further discussion. But, Mr. Roisman, thank 

you for meeting with me and our discussion on cryptocurrencies. I 

look forward to having conversation on my concerns, your concerns, 

in addressing these issues as well. 

Congratulations to the rest of you. Thank you. 

Mr. ROISMAN. Thank you, Senator. 

Chairman CRAPO. Thank you very much, and that concludes our 

questioning. I want to again thank each of you for coming and participating today in our hearing and for your willingness to serve 

this country. Some of you got more questions than others, but you 

should take that as a positive. Mr. Roisman and Mr. Bright took 

most of the incoming today. But we are concluded with the hearing. 

For Senators, all questions for the record need to be submitted 

by Thursday, July 26th, the close of business. And for our witnesses, responses to those questions are due by Tuesday morning. 

So please respond quickly to the questions that you receive. 

With that, this hearing is adjourned. 

[Whereupon, at 11:50 a.m., the hearing was adjourned.] 

[Prepared statements, biographical sketches of nominees, responses to written questions, and additional material supplied for 

the record follow:] 

36 

PREPARED STATEMENT OF CHAIRMAN MIKE CRAPO 

This morning we will consider the nominations of four more individuals to serve 

in key leadership posts in the Administration: 

Mr. Elad Roisman, to be a Member of the Securities and Exchange Commission; 

Mr. Michael Bright, to be President of the Government National Mortgage Association, or ‘‘Ginnie Mae’’; Ms. Rae Oliver Davis, to be Inspector General of the U.S. 

Department of Housing and Urban Development; and Dr. Dino Falaschetti, to be Director of the Office of Financial Research. 

Welcome to all of you this morning, and congratulations on your nominations to 

these very important offices. 

I see friends and family behind you, and welcome them here today as well. 

Each of these nominees, if confirmed, will play an important role in supporting 

our financial system, ensuring it remains vibrant, safe, and sound for all Americans. 

I will start by recognizing Mr. Roisman, in particular, who continues to do outstanding work for this Committee as Chief Counsel. 

I can personally attest to Elad’s impressive command of securities law, his keen 

intellect and work ethic, and his commitment to doing what is right. 

As many on this committee know, Elad is intimately familiar with the inner-workings of the SEC, having previously served as Counsel to Commissioner Daniel Gallagher, and as Chief Counsel at the NYSE Euronext. 

Elad—thank you for being a trusted advisor and resource to me, and to others 

on this Committee. 

If confirmed, I am confident that you will successfully execute the SEC’s mission 

of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. 

We will be sad to see you go, but the SEC will have gained a tremendous asset 

from which our whole country will benefit. 

Michael Bright also has a distinguished record as a Senate staffer, and is no 

stranger to many in this room. 

Over the last decade, Mr. Bright has established himself as a leading voice on 

housing finance policy. 

Most recently, over the past year-and-a-half, he has overseen all aspects of Ginnie 

Mae, including its nearly $2 Trillion portfolio of mortgage-backed securities, and has 

already taken significant action to protect taxpayers and help consumers. 

If confirmed, I know Mr. Bright will continue this important work, and I look forward to working with him on opportunities to address the last piece of unfinished 

business from the Financial Crisis: comprehensive housing finance reform. 

Rae Oliver Davis has dedicated her entire career to holding others accountable. 

As a former Assistant U.S. Attorney, Ms. Davis spent years investigating and 

prosecuting financial criminals, among other crimes. 

Over the past decade, she has turned her focus to holding the Government accountable, working for various Inspectors General within the United States Postal 

Service, the Troubled Asset Relief Program, or ‘‘TARP’’, and HUD. 

If confirmed as HUD Inspector General, Ms. Davis will draw from this deep experience, working on behalf of taxpayers to eliminate fraud, waste and abuse in our 

housing programs, and to make sure that those programs run as efficiently and effectively as possible. 

Dino Falaschetti has had a distinguished career in economics that spans academia, the private sector, and public service—most recently as Chief Economist for 

the House Financial Services Committee. 

For many years, Dr. Falaschetti’s expertise on finance, corporate law, business 

strategy, and economic policy has been widely sought out. 

In addition to holding faculty appointments at 8 different universities, Dr. 

Falaschetti served as Senior Economist for the President’s Council of Economic Advisors during the second Bush administration, where he worked directly under future Fed Chairman Ben Bernanke. 

At the Office of Financial Research, or OFR, Dr. Falaschetti will be charged with 

overseeing much of the research and data analysis that supports the work of Financial Stability Oversight Council. 

If confirmed, he will be a trusted and valued resource for FSOC and the Treasury 

Department as he has been for Congress and many others. 

We have four highly qualified nominees before us, and I urge my colleagues to 

support them so that they can quickly get to work for the American people. 

Congratulations, once again, on your nominations, and thank you for your willingness to serve. 

37 

PREPARED STATEMENT OF ELAD ROISMAN 

TO BE A MEMBER, SECURITIES AND EXCHANGE COMMISSION

JULY 24, 2018 

Chairman Crapo, Ranking Member Brown, and Members of the Committee, I am 

honored to appear before you today as the President’s nominee to serve as a Commissioner of the U.S. Securities and Exchange Commission. My professional experience as a securities lawyer at a global law firm, a chief counsel at NYSE Euronext, 

counsel to an SEC commissioner, and now chief counsel on this Committee have afforded me a broad spectrum of experiences that would enable me to effectively serve 

the public and carry out the SEC’s mission should I be confirmed. 

Mr. Chairman, I would like to introduce members of my family that are here with 

me today. My wife, Helaina Roisman, a social worker at George Washington University Hospital and, without question, my far better half. My parents, Hanna and 

Yossi Roisman, who taught me at an early age the importance of integrity and having the courage to do the right thing. My brother, Shalev Roisman, who showed me 

the importance of trying to understand the other side of every issue. My father- and 

mother-in-law, Larry and Laurie Bernstein, and my brother-in-law, Jacob Bernstein, 

who have all been incredibly supportive over the years. Lastly, my daughters, Talia 

and Yael, are too young to come today, but remind me daily of what is most important in this life. 

As the child of two immigrants who moved to this country determined to pursue 

a better life for themselves and their children, I have a strong appreciation for the 

stability and security that our form of Government and financial markets provide. 

My parents did not have much when they came here. But, what they did have was 

confidence—confidence in America, and confidence in a financial system that would 

enable them to save and invest so that they could raise their family and help provide for their children’s education. When I think about what gave them such confidence in a system that they barely knew, one thing stands out—public trust. While 

they may not have understood or appreciated the complex system of oversight and 

regulation that govern the conduct of market participants in our financial markets, 

they believed and expected that our markets were regulated in a fair and orderly 

manner with requisite investor protection, transparency, and accountability. 

While serving as a chief counsel at NYSE Euronext, I saw firsthand the excitement and pride of entrepreneurs and innovators when they rung the opening bell 

as their companies went public, enabling them to grow their companies, invest in 

communities, and allow investors to share in their success. My belief in the importance of fair markets and the role they play in our country is what motivated me 

to move from New York to Washington, DC, and join the SEC. I wanted to utilize 

my insights and experiences from the private sector and passion for the securities 

markets to help further the SEC’s important mission. As counsel to an SEC commissioner, I worked with the SEC’s expert staff and witnessed their dedication and determination to protect investors and enforce the law. And, as a chief counsel on this 

committee, I have developed the utmost respect for this institution and the critical 

role of congressional oversight. I believe my personal and professional experiences 

have prepared me well for the role for which I am being considered. I fully recognize 

and appreciate the critical role the SEC serves in the lives of investors so that families like mine can save for their children’s education, pay for unexpected expenses, 

and retire with confidence. 

The U.S. capital markets are the envy of the world and the importance of the 

SEC’s role in this cannot be overstated. Throughout its history, the dedicated commissioners and staff of the SEC have worked to preserve confidence as our markets 

grew and evolved. To continue this, the SEC must examine and reexamine its rules, 

regulations and guidelines to ensure that they are still working as intended to accomplish the SEC’s mission. This is most recently manifested in areas such as data 

protection and cybersecurity, as well as the emergence of new investments and technologies such as initial coin offerings and blockchain. It is essential that the SEC 

approach these new challenges in a fair and transparent manner, provide clarity 

and certainty to the markets and investors, and enforce the laws and regulations 

that hold market participants accountable. 

If confirmed, it would be an incredible privilege to rejoin the ranks of the SEC’s 

dedicated public servants and further its mission. Thank you. 

38 


72418001.eps

STATEMENT FOR COMPLETION BY PRESIDENTIAL NOMINEES 

Na~ac: Elad 

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40 


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!have no such plans. 

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41 


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DQminat~.. -

2. Li.Sf4oy jnvestmepts; obligalilli!S.l4bilitie;s, orotber ~lafiO{)Shlps wl!i~lunigll(involvc 

potential conflids ofintereStV.itb thcpositloa towlu'eh you bavtbeeP.)IOJDill_a(~ 

In colllleiCtion wjth the nominatlOI!1XOCeSS.l bave'CODSU!!cd wjth tho Office of 

Government lithiC, and !It U,S. Sei:Urit.ies and £.-i,hange Comni!Ssion 's C$ECl 

,Dcsfgnajed Agency£tbjey Official to identifv ootenrial confli'Cis ofinttreSt. );ey 

ooieri1ihl"confliC!s<>f.intere& will OO.resol>~eit inMC!!rllance wjth.the lennsof!he E'!hiei· Agreell!elltthat lhavt-entmd into with 1l!e SWS Ethic.s-Oiiiclatand that has'be'en 

provided :!a !his Committee. "I am not aware of an¥ oj!Jer ooten!ial ~nflitts otintmsy 

3. Describe any lrgsiDcss ~p, ~ orfiDancial1raasaCiioa (other than tax 

paying)wlticb)'P)IIIa~~duJingth~~I'IO~wilb.theFed!WGp~t, 

~for yourtd"f; on1iehalfof a olien~ or acting as an ~f!lill)lig!lt in~ 

wp.y cons~tut~ OJ resull in a W$Sible~nflict pf ill~ 1\'fth the_ position to wbich 

yOU have' been II,,CQiris:~d. 

In C!!~tion wi(b iJ!e'mrnina'fion proccss.l6ave 'cogsu!ted with the :Office of 

.Governmcnt!l!l!ics'ind the u.s. &cilrities aile! f.Jsc!wlge COmpi!ssioo's ISECl 

dtsignated aa9!CY etbies-official ioidtntitv o®hl to!lflic!s ofinltrest. Nrr ootential 

-dlill!Icts ofintmst will be glved in-accordance with !he tmnsgttht EthiCS' 

Al!reeli!el!! that l havcenteied into-with thcSEC'tErliics Officiahlld:lhat has been 

·provided to ibis Commjnee. ·I alii not·a...pofllly o!hermotia! ooollid$o(intettSt, 

4. List.ally.iobbyiilg, activity'during the past tea years in V~bicb )'().~ ave et)~~ 'in for ll)e 

p lllp!)St Qf clirectiy or indireclly influencing: \be passager defeat 1lt modifi'chtion of 

any legislati91i al·tlie natio~ le~!_ ~f&oyerpmi:nt or t,ffe¢ilg til~ amruru-o-111!1' c~ution ofnationat:Jaw Ot' pllblic P.<'licy. 

~- ExplajD bow )'0!1 will resolve any conflict ofia~ that ~y be disclosed" by your ~to the ijems--above. · 

lit ooi\necuon wjth ·the nomination process, r have Consul!td with the Office of 

Govemmeht Ethic.!·anti life US. -Securities lad Exehan!!t Comlhiss!ori'~(SECl Oesigm!ed Agm Ethics Official to ideniify"ooientia! col!llicts of 1nttrest: Any 

l!O!entia! coriflictsofjntmS! Will bemolved·ig a«ordaoce wjtb tbe:tenn.s of !be Etbjcs 

A.gretmept )hat I haye entmd-inro withtheSEc•s·f.!hits Officiall!!d tbat-ba< been 

p!!ivided fo this Committee. lim not awaie o{any o!ber potential conllic!s ofintmsi. 
42 


72418005.eps

'Civil, ¢Mi.oal.aqd 

'juye;)iptory 

lictions: 1. Gi~e the-full1!e1ailsof~ ciYil o(ciiJili!l81 P.roOeedingin.WbiciJyou ~ adeftlldatlt 

1lr any inql!iJx or inVestigation ey a. Fe&ral, State, or local agency in which you wert 

1he,subject of the lqquiry or iilYesti~on. · -

l am the liill de;ails ot any procccding. ioquiJy or jnvestipion by any professional 

~on incllxlilit-anybeJ-~IiOil'ill iltich you~ !hesabjectofthe 

p~bg, inquiry Ot inve!ti~ti011, 

"J;3lA. 
43 


72418006.eps

The undmigned certifies that the information contained herein is aue ml comet 

Signed: ~~ 
44 


72418007.eps

Qulific:atioai: ~ fully )'OU[ ~tioos Jo set'IC in t1te position 10 which YQU have been lllllled. (8tlacl!~t) . 

I hav.c •ntmy .entire carea pradicing and I'd vis~ on C<OIJXlrale.and ~ties law. ai~law 'fumj.& ltgU)ated 

-epti'!Y,.the V.S . .Securltie$ ao.d ~cilange CpQJII!jssion (SEC) and ~n~, My diN~ ~,rls'experienpc bas 

lielped mtdeveio~ a liackgro'Uild whieb, if oonliiin«<, would"ailow me 'to worlc constn)~tively With tile 

CommisSioners and .staff of the ·sEC to promo~ and. fufill the.t11issfon o( the a~C1,1Wntly, to ,protect 

iri~tors, maintain fafr, otde;Jy, ~d eftici¢ marlcets. ~ ~ilita~ capital foimatio!L 

A!. a lawyer a! Milbank,_ T'ii'CJed, Hadley .t~loy W IWQJied'-lith Jllib!ieand _priyate ~on 

mergers; qaisitioas, and clisposiiioas and to!pOII!e-mauers: I c!iai\ed lransaciiQn • .rtlited lfpmenU, 11111'11111 

auctions ofplil~c ~ ~e· co;ripanies.J fj!lisecl clients Clll~ go~ malietS aoarepcrung 

obligl!ioils undC> tbe Securilies Actof1931and tbeSeeuri~ExcbangeAct of 1934, anciNYSE 111Ct 

NASDAQ Listi.Dg Rules. . . · 

AJ a chief co=l:arNY.SE 'Eiironext.(now the lntttconfihental BxcllaJlie), I eollilseled~~~'tlld 

buM~ lines Qn·a \Yiile zao~e oflega!Jss,~ inclijding reg\llatory and litigation matters, '!radio&. matters! 

mergers and acquisl.tions, )'!YS£:and'SEC filiP8S. I wotked, with{Dwgemf;lll.a¢ b~~n~ op SilO 

lilin8$ and ioteru!ed With S.ECstaff on regulatory lliatfers: I belped ol'g'aj\izt ~nin~lio ~t ~ c()lllJ)&r!y 

'b9ard meeringt served in a:corpPrate ~wy ~on, and drllled ~ ll!&lerials. 

Addlriooally., ill tHe Fat! semesterot20ll; I lfclped teach•Co!Jl')i'ate Qo~qWijh R61lein Reck(lt 

fordhan) Uni~~~ of4W, The fOCII'wasonthe~groJe:aftheboazd'Ofdirectors injlllblic· 

~panits.inclwlil!gtlietuiiattla\ti,ru!e:s1J141isti!'&~(iuch~ theDodq.f~WallSflee\ 

Reform and Coosmn~l'ttilectibn Acl'o1'20IO {Dodd-Frank Act). !be SaibaDes-oxley Ar:J. o(~ SEC'i'llle:s 

and regulan~ ijYst ll!les and Dela~t~ COipOQiion law).lhe Jdative rig)J4 mj o'bliptionsof sbarehQ!4m 

and clir=lm, the Structulin'g ofbcilnls aad COIIIIIIiUetS, ioc!udlitg!¥ Selectioo ofbciar:d membtrS, &Ad"~ 

~d other dis'closures. 

As a counsel to SEC COIIl!!lissiolltr Dailiel Gal~, I proVide!l.l$1 adVJ~oo regUla!Qiy apd-policy mattert; 

.including 1\ith respeet to tradint and tnalJ(ets, eo~np!ilnce, inspections, exalllinations.and' enfo!Uinerit iss~ 'IS 

~II as il)temaii qai ~f9iiu!i.9Jl.l -xo~ With othestommiisionet$'' ~ounse!s a.nd SEc staff Qil oil~ 

coll)pliance and .enfoiteiileot in8UeiS, reguli.tolYIIiitiari'leS add SEC g1iid.we: Oulln& my')jm~ 1\illi · 

Cc!Jl!lll)ssioper Oa!lagh~r,J I~ ftom SEC ~ll!ff, iilvesto!i,1Cg\llated entities, iSSUe~s, other 111arl<et 

f3Jtit!p8iits and interested parties vti_th .. iange ofvie\\'11.6iilts ab(,l)fvi!liO~ II¢$j~ues befQM\I!e 

Comrniss)on. 

A!. both a Seniilr/Secllfiti~ CouilseJ w la!er a Chief C,olnsel for Chaiimeo·Sbell!y and Crapo I have 'Provided 

~on SEc,COJiltn«<ity FlllllrerTrading Corttmislion,FmancialSUbility OYcmght Com!cil and Finaltial 

Sllbi!ily Boal!illl2~et; incb,Jd(og~ties and deriYlliv=mallen and thcimpl~n of the Dodd·Frank 

and 1bt Jlllilpslart Out Btisiitess Stanups (JOBS) Acts. I have wotbd-wil!l Re[l!lb!kA ~ ~ sebatois 

and their sWfon.Iegi.siaii~ and aid~ 1\ithtorte:spOndenee to regUJatotS.anilgoVtmmentsgencles. Tbese 

effo~.qf!e~ reqUired extensive.coijabetati~ to·cnfi so)uiioas to~~ facing our ~ial regualtory· 

systro~, J ha\le also oigailiztcl·c:O~onal healings regaril~ ovemght.:.f1he s~ other !inancjal 

regulatOIS I,Dd ihroug!l\bes'e intcreactiOIU ~ined (greater undertandibg Of the iSSQCS tJiat tbey.faee'. 

AQditi011ally, ~ parip~ my job;! have met l\'i!h oon$ti!U~ts,invtilots, Jll&ikeiparliclpants,.resJ!latecfentilies,, collSUmer g!oupf, J!alional aild int~attonal g(lverill!\cnl !lllicials· and r~atorll, ~ and indivudliJJ and 
45 


72418008.eps

groQps wbo ~deeply abo111 the marltcls tballhc SECo~ 81!11 ~119 ~~will) a myJiad of 

dilftm!tJ~ I ba~ learned fi'oll!~orieof1hdnneetiilgsaod it ~helped me deVelopabeller 

undemanditlgoftbe mmetsa5 wellas1herole of the SEC. This Wl11~ub!~ belpmtmam confirmed. 
46 

PREPARED STATEMENT OF MICHAEL R. BRIGHT 

TO BE PRESIDENT, GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

JULY 24, 2018 

Chairman Crapo, Ranking Member Brown, and distinguished Members of this 

Committee, thank you for inviting me here today. It is an honor to appear before 

you as the nominee to be the President of the Government National Mortgage Association, or Ginnie Mae. 

Let me take a moment to quickly thank my family who is here. I’m joined by my 

wife, Maggie, and my son, Mac. My daughter Margaux, who is 5, is at her grandparent’s house in Florida, probably watching on the computer. All three of them 

have been incredibly supportive of me since coming to Washington, and that comes 

despite the many nights of coming home tired, grumpy, and distracted with work. 

I know that I ask a lot of them, and I am always thankful for their love and support. 

In addition to being a father, for the past 12 months it has been my honor to 

serve as the Executive Vice President and Chief Operating Officer of Ginnie Mae. 

I’d like to tell you a little about what I have learned, and what I think still needs 

to be done. 

Ginnie Mae was created in 1968 when Congress spun off Fannie Mae as a Government-sponsored private company and retained Ginnie as a complimentary Government corporation given the task of facilitating the securitization of certain mortgages with an explicit, transparent, and paid for Government guarantee. Ginnie 

Mae has since evolved into a $2 trillion Government security with a focus on facilitating lending to low and moderate income, rural, urban, and veteran borrowers. 

Today, Ginnie Mae’s bond and Ginnie Mae’s brand are globally recognized as the 

most pristine mortgage security in the world. This is because of Ginnie Mae’s track 

record of success and our robust process for ensuring the timely payment of principal and interest to security holders. Ginnie Mae has never missed a payment in 

its 50 years of existence, even during the financial crisis. That is exactly what an 

explicit Government guarantee is meant to provide and delivering on that mission 

is what we do every single day. 

The day job of managing the roughly 150 employees of Ginnie Mae has been an 

incredibly rewarding experience for me over the past year. Ginnie has some of the 

most dedicated, knowledgeable, and mission-focused professionals I have ever 

worked with. They are squarely focused on the challenges of dealing with both 

Ginnie’s growth and the evolving nature of the U.S. mortgage market. 

To address these challenges, over the past 12 months we have launched a modernization campaign called ‘‘Ginnie Mae 2020,’’ a 3-year strategic plan that will have 

our data centers running on cutting edge technology, realign our counterparty risk 

management framework, help bring in additional financing for mortgage servicing 

rights, and expand our global investor base through outreach and education in dozens of countries around the globe. All these efforts are well underway, some are 

even nearing completion, and we are very excited about the promise they hold for 

the future of our organization. 

One issue I have worked with many of you on this past year is that of so-called 

‘‘VA loan churning,’’ or the rapid refinancing of VA loans with little or no benefit 

to the borrower, as well as the making of VA loans at interest rates higher than 

a veteran should be getting. I want to specifically thank Senators Tillis and Warren 

for their leadership on this issue. Between the work we have done administratively 

at Ginnie as well as the language recently passed into law, we have taken a major 

step towards rooting out behavior that was threatening the very viability of the 

Ginnie security, and thereby threatening the viability of the VA, USDA, and FHA 

programs we support. We will not tolerate this behavior, and we now know that 

Congress stands with us. Collectively, our efforts are working. We can already see 

that in the form of a better security price, which directly translates into lower rates 

for FHA, VA, and USDA borrowers. 

I didn’t begin my career in Washington. I came here after working in my twenties 

on mortgage trading desks in Los Angeles and Charlotte, including through the financial crisis. During that time, I learned thousands of lessons that I place into two 

thematic buckets: First, I learned that the mortgage market is incredibly technical 

and enormously complex. I feel honored to be able to use the technical knowledge 

I gained to serve a broader public policy mission that benefits all Americans. Second, I learned that greed and unbridled ambition can be dangerous realities, and 

if left unchecked in the housing market, the consequences can be disastrous. I came 

to Washington in large part to help ensure we never repeat the 2008 financial crisis, 

and I wake up every day with that mindset still. 

47 

I also want to say thank you to the Members and staff that I have been privileged 

to work with in the past, most especially Senator Corker. Working with Senator 

Corker, Senator Warner, Senator Crapo, and other Members of this Committee as 

a staffer was a tremendous honor and an experience I still think about every single 

day. 

Going forward, my main goals for Ginnie Mae are to ensure that the agency is 

well run, and that the agency can continue to serve its statutory obligations to help 

ensure a stable U.S. housing market. There is much to be done, and I look forward 

to the task. 

Thank you. 

48 


72418009.eps

STATEMENT FOR COMPLETION BY PRESIDENTIAL NOMINEES 

Name: 

Bright Mi<had 

Position to which nominated: President, Government National Mongage Association 

Date of nomination: 

Date of birth: Place of birth: 

29 September 1978 Warren, Ohio 

Marital Status: Married Full name of spouse: Marguerite Booker Bright 

Name and ages of children: Macallan Galbreath Bright (9) Margaux Francesca Bright (5) 

Education: 

Honors 

and awards: 

Memberships: 

Institution 

Dates 

attended 

Degrees 

received 

Dates of 

degrees 

Johns Hopkins University 9/1997-5nooo Bachelors 5nOOl 

Johns Hopkins University 9n000-5noo2 Masters 5n002 

(enrolled in oombined 5-year BAIMA program) 

List below all scholarships, fellowships, honorary degrees, military medals, honorary 

society memberships and any other special recognitions for outstanding service or 

chievement. 

None 

List below all memberships and offices held in professional, fraternal, business, scholarly, 

civic, charitable and other organizations. 

Organization Office held (if any) Dates 
49 


72418010.eps

None 

Employment record: List below all positions held since college, including the title or description of job, name 

of employmen~ location of work, and inclusive dates of employment. 

Countrywide Financial Corporation 

Senior Financial Analyst, Trader 

2002-2006 

Calabasas, California 

Responsible for modeling prepayment risk in mortgage-servicing rights (MSR) portfolio and hedging against 

movements in interest rates 

Wachovia Bank, NA 

Associate 

2006-2008 

Charlotte, NC 

Managed a market-making trading book of Agency MBS and Agency MBS options (calls/puts) 

Office of the Comptroller of the Currency 

Financial Analyst 

2009-2010 

Washington, DC 

Managed the "mortgage metrics database" used ot evaluate loan modification, recidivism rates, and loss 

reserves by large banks 

Office of U.S. Senator Bob Corker 

Senior Financial Advisor 

2010-2014 

Washington, DC . 

Legislative Assistant responsibilities for Senate Banking Committee issues 

BlackRock 

Vice President 

2014-2015 

Washington, DC/New York, NY 

In ''Fmancial Markets Advisory" division, assisted CCAR and DFAST banks with modeling challenges 

PennyMac 

Senior Vice President 

2015-2016 

Washington, DC and Westlake, CA 
50 


72418011.eps

Managed all day-to-day operational issues with loan delivery to GSEs 

The Milken Institute 

Dirutor 

2016-2017 

Washington, DC 

Authored paper.; on housing reform and financial regulation 

Ginnie Mae 

Executive Vice President and Chief Operations Officer 

Washington, DC 

Oversee all operational and managerial issues of Ginnie Mae's securitization program 

Government 

experience: List any experience in or dirut association with Federal, State, or local governments, 

including any advisory, consultative, honorary or other part time service or positions. 

Office of the Comptroller of the Currency -employee 

U.S. Senator Bob Corker-employee 

National Credit Union Association-NCUA was a client ofBiackRock 

Ginnie Mae/HUD • employee 

Published 

Writings: List the titles, publisher.; and dates of books, articles, reports or other published materials 

you have written. 

"Why Housing Reform Still Mailers" (June, 2016)-Milken Institute 

"Toward a New Secondary Mortgage Market" (September 2016)- Milken Institute 

"Affordable Rent and Access to Homeownership" (May2017)-Milken Institute 

"How a Financial Transactions Tax Could Work"- Yahoo Finance Op-ed, July 20,2016 

"Bank Stress Tws: Where They Add Value, and Wlzere They Add Risk"- Yahoo Finance, Op-ed, October 2016 
51 


72418012.eps

"GSE 'Recap' Experiment Is Just a Sideshow" - American Banker Op-ed, Dec, 2016 

Political 

Affdiatioos 

and activities: List memberships and offices held in and services rendered to all political parties or 

election committees during the last 10 years. 

None 

Political 

Contributions: Itemize all political contributions of $500 or more to any individual, campaign 

organization, political party, political action committee or similar entity during the last 

eight years and identify specific amounts, dates, and names of recipients. 

Qualifications: 

Future employment 

relationships: 

Rep. Blaine Luetkemeyer· $500. 

State fully your qualifications to serve in the position to which you have been named. 

(attach sheet) 

Attached 

l. Indicate whether you will sever all connections with your present employer, business 

firm, association or organization if you are confirmed by the Senate. 

Current employer is Ginnie Mae. 

2. As far as can be foreseen, state whether you have any plans after completing 

government service to resume employment, affiliation or practice with your previous 

employer, business firm, association or organization. 

None 
52 


72418013.eps

3. Has anybody made you a commiU)lent to a job after you leave government? 

No 

4. Do you expect to serve the full term for which you bave been appointed? 

Yes 
53 


72418014.eps

Potential conflicts 

of interest: I. Describe any financial anangements or deferred compensation agreements or other 

continuing dealings with business associates, clients or customers who will be 

affected by policies which you will influence in the position to which you have been 

nominated. 

None 

2. List any investments, obligations, liabilities, or other relationships which might involve 

potential conflicts of interest with the position to which you have been nominated. 

None 

3. Describe any business relationship, dealing or financial transaction (other than tax 

paying) which you have had during the last 10 years with the Federal Government, 

whether for yourself, on behalf of a client, or acting as an agen~ that might in any 

way constitute or result in a possible conflict of interest with the position to which 

you have been nominated. 

None 

4. List any lobbying activity during the past ten years in which you have engaged in for the 

purpose of directly or indirectly influencing the passage, defeat or modification of 

any legislation at the national level of government or affecting the administration and 

execution of national law or public policy. 

\Wlile employed at PeMyMac, I worked on legislation to allow Real Estate Investment 

Trusts (RE/Ts) to remain members of the Federal Home Loan Bank system. I was 

not a registered lobbyist as this was a tiny percentage of my time and duties at 

PennyMac. 

6 
54 


72418015.eps

Cil'il, criminal and 

investigatory 

actions: 

5. Explain how you will resolve any conflict of interest that may be disclosed by your 

responses to the items above. 

NIA 

I. Give the full derails of any civil or criminal procteding in which you were a defendant 

or any inquiry or investigation by a Federal, State, or local agency in which you were 

the subject of the inquiry or investigation. 

None 

2. Give the full details of any proceeding, inquiry or investigation by any professional 

association including any bar association in which you were the subject of the 

proceeding, inquiry or investigation. 

None 
55 


72418016.eps

Qualifications: State fully your qualifications to serve in the position to which you have 

been named. (auach sheet) 

Witl1 over 15 yeaiS of experience in lhe financial services and housing finance sector, I am incredibly 

enthusiastic about bringing my expertise to Ginnie Mae to help lead the organizalion through the next 

phase of tts development. 

Since July2017, I have had the honor to serve as Exet~~tive Vice President and Chief Operating OffiCer 

of Ginnie Mae. In this capacity! have had the opportunity to manage Ginnie Mae's stall of nearty 150 

employees as well as several hundred support contractors. I am consistenlly impressed wtth lhe level of 

dedica~on and professionalism they all display on a daily basis. 

Ginnie Mae has a staff of highly mission-oriented employees who are eager to have leadership lhal helps 

them to analyze risks and seize opportuntties. Over lhe past year, Ginnie Mae has made great strides in 

polcing its security, including addressing high 'loan churning' in lhe VA home loan program. We have 

undertaken a comprehensive re-organizalion lhat has allowed us to separate the policy-making funclions 

from the oversight funclions vis·~·vis our issuers via lhe creation of a Policy Planning Office run by 

seasoned staff. We have begun a more holistic process ol identi1ying counler·party risks, including 

enhancements to our grading system, the beginning of stress testing and crahing of comprehensive living 

wills, and the promulgation of new rules designed to better anticipate troubled issuers. We have also set 

about the development ol a modem za~on roadmap which we call 'Ginnie 2020" lhat will include 

infrastrocture upgrades, technology modernization, and new risk management tools. And finally. we have 

buitt a new database and accounting toollhat will allow Ginnie to better manage any por1folios lhat are 

seized in a Mure emergency. More broadly, I have worked this past year to create a cu~ure where Ginnie 

staff feel ownership of our challenges and opportun~ies, feel they are supported by management in 

making sometimes difficutt decsions, and have pride in not only the work we dlo but also the manner in 

which we are perceived. It has been my honor to lead the organizalion as EVP and COO throughout the 

past 11 months, and I would be even more honcred to have the blessing of the Senate to serve at the 

Agency's President. 

My work at Ginnie has buill a great deal off my prior experiences. I began my carreer modeling and 

hedging mortgage-servicing rights (MSRs) for one of the largest MSR books in existence. These assets 

are not only highly financially complex in nature, but they are lhe main source of oollaterallhal Ginnie 

Mae has in lhe event a Ginnie issuers fails to abide by tts obrtgations under ~s program. An 

undeiStanding of MSRs, their risks, and their valuation is an important part of leading the organization, 

especially now that is has evolved into one where ~s issuer counterparties are monotine non-bank 

mortgage servicers, most of whom have MSRs as their primary asset. In order to fully appreciate the 

risks that Ginnie Mae faces in such a market, one must fulty understand the narure and nuance of the 

MSRasset. 

At Wacl1ovia, including during the financial crisis, I traded mortgage-backed securities (MBS) as a market· 

maker for clients. Ginnie MBS was one of the bonds for which I had market-making obligations, and this 

gave me insight into lhe nature of how Ginnie MBS tradie. Such experience will be valuable as I speak 

wit11 the investor commuo~ about the Ginnie security. In fact, under Ginnie Mae's statute, providing and 

maintaining ~quidity in the Ginnie MBS-hence bringing capaal to the U.S. housing market-is in fact the 

core responsabilitiy of the Agency. 

Working at the otf.ce of llle Comptroller of the Cu~ency provided me pe!Spective on how lhe regulatory 

community can most effectively engage ~h the lenders in a given program. There are areas where the 

OCC did 1his well, and areas where it did not. I plan to use all the lessons teamed from that time to 

manage Ginnie Mae in a professional, consistent, and effective manner. 
56 


72418017.eps

At Blacl<Rock I learned q~ite a M abo~t stress testing, both its value and its limitations. And at 

PennyMac, I saw many o.t the operaitonal challenges that lenders face in sectJrilizing mortgaes with 

GSEs. 

Finally, my time on Capitol Hill and at the Milk en lnstutute gave me a perspective on what the policy· 

making community expects ol a government agency such as Ginnie Mae. I am enthusiastic about one 

thing: running Ginnie Mae exceptionally well. If this provides policy-makers with options for leveraging 

lhe age~y in the future, then so much the better: 

Collectively, I believe my esperience positions me well to lead Ginnie Mae. H oonfinmed, I look forward to 

wort<ing closely with Congress over the coming years to ensure the continued flow ol capital to the U.S. 

hcusing mart<et 
57 

PREPARED STATEMENT OF RAE OLIVER DAVIS 

TO BE INSPECTOR GENERAL, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

JULY 24, 2018 

Thank you, Chairman Crapo, Ranking Member Brown, and Members of the Committee. It is an honor to appear before you as the nominee to serve as the Inspector 

General (IG) of the United States Department of Housing and Urban Development 

(HUD). I would like to thank my family, friends, and colleagues for their support. 

In particular, I would like to recognize my parents, Charles and Jerry, and my husband, Chris, for their love and support. I would like to thank my three stepchildren, 

Graham, Addy, and Liam, for inviting me into their lives and guaranteeing that I 

would never suffer a dull moment. 

I am proud to have made a career in public service and oversight. As a young 

staff attorney, I cut my teeth working on the then-Senate Governmental Affairs 

Committee and the House Government Reform and Oversight Committee. I then 

joined the Tennessee Office of the Attorney General where I led consumer protection 

investigations that resulted in nationwide settlements with Fortune 500 companies. 

I aspired to be a Federal prosecutor and was fortunate to receive an offer with the 

U.S. Attorney’s Office for the Western District of Tennessee in Memphis. I prosecuted a wide variety of cases in that office, including everything from false tax 

claims and investment schemes to firearms and drug violations. 

After deciding to return to our Nation’s capital, I landed in the IG community, 

where I have spent the last decade of my career. I have worked in three unique 

and challenging agencies—the Postal Service, the Special Inspector General for the 

Troubled Asset Relief Program (SIGTARP), and most recently HUD. I have been 

boots-on-the-ground conducting and leading investigations. I have also served in two 

senior level positons where I gained an appreciation for the tough decisions IGs 

must make every day. 

In my most recent position with HUD OIG’s Office of Special Inquiry, our efforts 

have focused on senior official misconduct and enterprise-level risk to the Department. We have created a multidisciplinary team of attorneys, investigators, and 

auditors to address complex issues in a comprehensive manner. 

I would like to share with the Committee my personal constitution with respect 

to IG work and my vision for HUD OIG, if confirmed as Inspector General. 

The foundation of IG work is independence. It is the principle that protects our 

ability to shed light on the truth about Government. An independent IG cannot 

allow the department or agency it oversees to direct its work in any way. And an 

independent IG cannot accept obstruction or delay in gaining access to agency 

records. 

I also believe the best IGs are strong communicators. IGs must have solid relationships with their authorizing and appropriating committees to ensure they 

prioritize the right work and keep Congress informed. In my rounds with Senators 

and your staffs, I committed to ensuring that we conduct comprehensive investigations and deliver thorough reporting. I am aware that our work is also of significant 

interest to American taxpayers. Shedding light on Government mismanagement and 

misconduct through our reports can be as effective as prosecutions and financial recoveries. 

To remain current in our efforts, we must communicate well with HUD. We can 

be independent in the direction of our work and reporting while maintaining strong 

lines of communication about HUD’s priorities, initiatives, and planning. I believe 

strongly that we must also be active in the IG community, through cross-cutting initiatives, training programs, and development of best practices. 

My vision and goal-setting for HUD OIG will focus on effectiveness. We can spark 

positive change by making hard-hitting recommendations relating to HUD’s top 

management challenges. 

HUD’s mission is far-reaching and there are many pressing issues in HUD programs that require attention. I am honored to be considered as the nominee for this 

important oversight position. 

I appreciate the opportunity to come before this Committee and to answer your 

questions. Thank you for your time today. 

58 


72418018.eps

STATEMENT FOR COMPLETION BY PRESIDENTIAL NOMINEES 

Name: Oliver Davis 

(l..ast) 

Position to which nominated: 

Valeria 

(Fint) 

Inspector General for the U.S. Depanment of Housing and Urban Development 

Date of nomination: 

Rae 

(Other) 

Date of birth: 03/18/1972 Plaee of birth: Padueab, Kentucky 

(Day) {Mo<:ll) (Y<II) 

Marital Status: Married Full name of spouse: William Christopher Davis 

Name and ages of children: I have three step-children by marriage. Graham Morrissey Davis, age 25; 

Adaliah Sarah Davis, age 22; and Liam Robert Davis, age 18. 

Education: 

Honors 

and awards: 

Institution 

Dates 

an ended 

Degrees 

reoeived 

Munay State Univmity, 1990· 1994, B.S., May 1994 

University of Memphis School of Law, 1994 • 1997, l.D., May 1997 

Dates of 

degrees 

List below all scholarships, fellowships, hono181)' degrees, militaJy medals, honorary 

society memberships and any other special recognitions for outstanding service or 

achievement. 

lreoeived the following awards while serving atllle Office ofllle Special Inspector General for ll1e Troubled Asset 

Relief Program: 

2012 ·Special Act Award 

2013 • Diuinction Award for Outstanding Legal Support in SIGTARP Investigations 

2014 ·Special Act Award 

I also reoeived the Enterprising Spirit Award from the Tennessee Bar Association Young Lawyer Board for 

spearheading a special continuing legal education course concerning suicide and substance abuse in tile legal 

community. I don~ ~all the date of the award. 
59 


72418019.eps

Memberships: List below all memberships and offices held in professional, fiatemal, business, scholarly, 

civic, charitable and other organizations. 

Organiulion Office held (if any) Dates 

Alpba c,.,.,. DdtaS.rority Treasurer, Pr<$ident 1990<ol994 

Ttoowcc Bar Allo<~tioa W~,g Lall)'as Board Ap9f0x. 2004 ·1006 

Coooc~ o!Commaoil)' S.nict Member of Nonprofit Board Approx. 2(100. 2001 

G11<t DCPrab)ltrilo Cbor<b Community Group Leader Approx. 3/2014<ol012017 

Old Prab)1trilo M<tting H- CootdinatorofNew Member Class Approx.I0/2017 <oprt.<tn< 

I may have beida Teaamtt State Soc:itty m.cmbtrsbip wbile wortdog oo Capilol HIlL I doa'l rttall tbe uac:t dates. 

,...,,.,.u ontlldioc ttl<astoocTtoo..,.. ¥ooag Rtpobli<to ""' wbi~l •·ufi>iog ioNullvillt. Tbtrdo,.., 

it is possible I bdd 1 mtmbtnbip soatttime io tbt earty 2000's. 

Employment record: List below all positions held since college, including the title or description of job, name 

of employment, location of work, and inclusive dates of employment. 

Government 

experience: 

Published 

Writings: 

Please see my attached professional resume. I have supplemented my resume by 

Jisrillg a number of positions below thatare responsive to this questioo. 

1) I worked at both El Chico's and Ruby Tuesdays as a server's assistant and 

server throughout summers and holidays of college and before starting law 

schooL I do not recall the exact dates. 

2) I was an intern for Shelby County after my first year in law school. I was 

assigned to the Shelby County District Attorney's Office. I believe I held this 

position over the summer of 1995. 

3) I was a law clerk atthe law firm of Shuttleworth, Smith, McNabb and 

Williams in the summer of 1996. 

4) I clerked for the Shelby County Criminal Court judges during my fmal year 

of law school. I do not recall the euct dates. 

5) I worked for a number of weeks in 1999 for Maio Street Communications 

in Washington, D.C.! answered the phone and assisted the owner with his 

schedule. 

List any experience in or direct association with Federal, State, or local governments, 

including any advisory, consultative, honorary or other part time service or positions. 

Please see my attached resume. 

List the titles, publishers and dates of books, articles, reports or other Jlllblished materials 

you ha.ve written. 

NIA 
60 


72418020.eps

Political 

Affiliations 

and activities: List memberships and offices held in and services rendered to all political parties or 

election committees during the last 10 years. 

N/A 

Political 

Contributions: Itemize all political contributions of$500 or more to any individual, campaign 

organization, political party, political action committee or similar entity during the last 

eight years and identify spedfic amounts, dates, and names of recipients. 

Qualifications: 

Future employment 

relationships: 

I don't recall making any campaign contributions in the last eight Y.ears. My search 

oftbe Federal Election Commission public database and the Tennessee Registry of 

Campaign Finance public database did not reveal any reportable contributions in 

my name. 

State fully your qualifications to serve in the position to which you have been named. 

(attach sheet) 

Please see attached. 

I. Indicate whether you will sever all connections with your present employer, business 

finn, association or organization if you are confinned by the Senate. 

I currently serve as a member of senior staffwitb the Office of the Inspector General for the U.S. 

Department of Housing and Urban Development. 

Potential confiicts 

of interest: 

2. As far as can be foreseen, state whether you have any plans after completing 

government service to resume employment, affiliation or practice with your previous 

employer, business finn, association or organization. 

I do not bave any plans after completing government service. 

3. Has anybody made you a commitment to a job after you leave government? No. 

4. Do you expectto serve the full tenn for which you have been appointed? Yes. 

I. Describe any financial arrangements or defenred compensation agreements or other 

con·tinuing dealings with business associates, clients or customers who will be 

affected by policies which you will influence in the position to which you have been 

nominated. 
61 


72418021.eps

Civil, criminal and 

investigatory 

actions: 

There are no fmancial arrangements, deferred compensation agreements, or 

continued dealings that I think are responsive to this question. 

2. List any investments, obligations, liabilities, or other relationships which might involve 

potential conflicts of interest with the position to which you have been nominated. 

There are no investments, obligations, liabilities or other relationships that are 

responsive to this question. 

3. Descriile any business relationship, dealing or financial transaction (other than tax 

paying) which you have had during the last I 0 years with the Federal Government, 

whether for yourself, on behalf of a client, or acting as an agent, that might in any 

way constitute or result in a possible conflict ofinterest with the position to which 

you have been nominated. 

There are no relationships, dealings or fmancial transactions that may result in 

a poasible conflict of interest. 

4. List any lobbying activity during the past ten years in which you have engaged in for the 

purpose of directly or indirectly influencing the passage, defeat or modification of 

any legislation at the national level of government or affecting the administration and 

execution of national law or public policy. 

I have not bad any involvement with any such lobbying efforts. 

5. Explain how you will resolve any conflict of interest that may be disclosed by your 

responses to the items above. 

Should any such con Riel arise or Mme into question, I will consult tbe 

designated agency ethics official. 

I. Give the full details of any civil or criminal proceeding in which you were a defendant 

or any inquiry or investigation by a Federal, State, or local agency in which you were 

the subject of the inquiry or investigation. 

In April200S, while serving as an Assistant United States Attorney, I self-reported judicial critkism I 

received to the Department o:f Justice's Office of Professional Responsibility(OPR). The criticism came 

in a Sixth Circuit Court of Appeals opinion and related to statements I made to the jury during my 

closing argument and of a question I asked the defendant on cross-examination. 
62 


72418022.eps

As a result, OPR opened an investigation which concluded with a finding that! did not engage in any 

mi~nduct. They reviewed the record and interviewed me, at least one of my colleagues, and my 

supervisors. I did not receive any discipline as a result of the criticism or the investigation. 

2. Give the full details of any procteding, inquiry or investigation by any professional 

association including any bar association in which you were the subject of the 

procteding, inquiry or investigation. 

I received notice in early November 2010 that my Tennessee bar license was suspended on October 25, 

20 I 0, because the bar association had not received payment of the required annual fee of $168.00. I was 

unaware that my payment was past due until l received this notice. l have no reason to believe that notice 

concerning this fee wasn't mailed to me at my residence; however, I don't recall receiving it. Once an 

additional mailing alerted me to the administrative suspension I took immediate steps to ensure 

reinstatement. I sent payment via overnight FedEx to the Tennessee Board of Professional 

Respcnsibility, and the suspension was lifted on November 8, 2010. 

A representative of the Tennessee Board of Professional Respcnsibility recently explained to me that the 

board does not consider such an administrative suspension to be "discipline• that must be included in the 

disciplinary repcrt that the board maintains for each member of the bar.! have attached the disciplinary 

repcrt as well as a letter of good standing. 
63 


72418023.eps

Confidential Financial Statement 

Net 

\Worth 

Provide a complete, current financial net worth statement which itemizes in detail all assets (including 

bank accounts, real estate, securities, trusts, investments, and other financial holdings) all liabilities i~luding 

debts, mortgages, loans, and other financial obligations) of yourself, your spouse, and other immediate members 

of your household. Please see attached 

ASSETS LIABILITIES 

Casll on hand and in banks Notes payable to banks-securtd 

U.S. Go,emment securitiewdd Notes payable to banJ<s.<Jnsecured 

Sdtedule Notes payable to relati'es 

U..ed securi1ies-oddsd>edule Noces payable to o0m 

Un i~ed securitiewdd schedule AC<OWll.land bills due 

Accounl.l and notes rmirabl~ Unpaid income tax 

Due liom r<lati'es and friends Other unpaid tax aod iotmst 

Due liomothcts Real estate mortwes payable dd 

Doubtful sd>edule 

Real-o•ned-odd sd>edule Cltandrt1011gagesando!lterli<os 

Real""" mortgages rmirables payable 

Autosandollt<tper>Otlllpropec1y Other debl.l-itcmize: 

Casll value-lifei1l$111111oe 

Other assets--itemize: 

ocal ~bilities 

Ne1wonh 

ToW assets otal liabilities and n<l •~rth 

CONTINGENT LIABILITIES ~ENERAL INFORMA TJON 

As codo!>er, co-mak<t or g.arantor Are any asstl.l pledged? {Add schedule) 

On leascsorcontriCIS 

Legal Claims Are)~ de fondant in any wil.l or 

Pro,isio<> for Fedetalln<Ome Tax legaloctiOil.l? 

Otl\ttsp6Ci~ M! Hilt >l>il 1;1'11 W:tn bankru~>teY 
64 


72418024.eps

SOURCES OF INCOME LAST 3YEARS 

I. List sources and amounts of all income received during the last 3 yean, including all salaries, fees, 

dividends, interest, gifts, rents, royalties, patents, honoraria, and other items exceeding $500 or more. 

(if you prefer to do so, copies of U.S. income tax returns for these yean may be substituted here, but their 

submission is not re<juired.) 

Salary 

Fees, royalties 

Dividends 

Interest 

Gifts 

Rents 

Other-exceeding $500 

Total 

Yw:2017 Year:2016 Year: 2015 

151,775 138,m 143,343 

255 193 

Taxable refund 1,472 Taxable refund I ,SOl Taxable refund 609 

153,502 140,686 144,300 

(Add sched•le ilemiling each individual source ofi11<01l1e which exceeds $SOO. If you 

are an attorney, a«:ountan~ or Olhcr professional, auach schedule li~ing all clien~ 

and c~ornCfS whose billings ex ««<ed three quanCJS of one percent of)·our gms 

billings during each ofthel~3ycars.) 

2. List sources, amounts and dales of all anticipated receipts from deferred income amngements, swclt options, 

uncompleted contracts and other future benefits which you expect to derive from previous business relationships, 

professional services and firm memberships or from former employers, clients, and customers. 

There is nothing that is responsive to this question. 

The undersigned certifies that tile information contained herein is true and correct. 

Signed: 1/kt, r?w 0~ ~ · Date: S / .Jo/ I d • 
65 


72418025.eps

RAE OLIVER 

6307 Fort Hunt Road, Alexandria, VA 22307 

(0) 202402-6010 (C) 615-289-9219 

voliverdavis(alhudoig.gov 

PROFESSIONAL EXPERIENCE 

Offke of the lnspeetor General-U.S. Depal1ment of Housing and Urban Development 

• Acting Assistant Inspector General for the Office of Special Inquiry, February 2017 · Present 

• Special Counsel, April 2016 • February 2017 

Lead a multidisciplirwy team comprised of skilled professionals including lawyers, criminal inv~tiga ors and 

forensic auditors whose mission is to address cases involving conflict of interest by senior officials as weU as 

improper influence of nationwide programs. 

Office of !be Special1nspector General for tbe Troubled Asset Relief Program 

• Cbief Investigative Counsel, August 2015 • April2016 

• Acting Chief Investigative Counsel, Apri12015 • August 2015 

Led a team of experienced former federal prosecutors and highly experienced criminal investigators taslced with 

investigating criminal condllCt nlated toT ARP. Sme on the Special lnspectorGeoeral~ senior steff and the 

Investigation Division's management team. Supervise the Investigation Division's contribution to the agency's 

quanerly report. Represent the agency at the Rescue Fraud Working Group and the National Interagency Banlc 

F~ud Worlcing Group. Ad~ise Front Office staff, the Office of General Counsel, the Special Agents in Charge, 

and the Department of the Treasury on a regular basis. 

• Assistant Cbieflnvestigative Counse~ August 2013 • Apri1 2015 

Promoted to the Special Inspector General's senior steff and the Investigation Division's management team. 

Smed as A Cling Chief Investigative Counsel on a regular basis. ~igned and implemented nationwide 

training prognm for the lnv·estigation Division. Received Special Act Award. 

• Deputy Cbicf Investigative Couasel, November 2011 - August 2013 

Assisted criminal investigators and prooecutors with investigating fraud in connection with TARP. Partidpated 

in interview~ Reviewed me:morandums of interview and subpoenas. Participated in case briefin~ Presented 

ease srudies at interagency working group meetings. Acted as mentor in ageneys leadership development 

program. 

Offict of the IDspeetor General- United States Postal Service 

• Attoruey, November 2008-November 2011 

Served as primary legal C0\111Sel to the Internal Affairs Unit tasked with investigating both criminal and 

administJative allegations against emplo~ of the inspector general as well as refettals from the United States 

Postal Inspection Servie<:. Provided legal advice and tJaining to criminal investigators on matters related to 

eriminal, administJarive. and whistleblower investigations. Reviewed incoming allegations, reports of 

investigation, underoover proposals, and subpoenas. Served periodically as Acting General Counsel and 

Deputy of the Criminal Division. 

Burcb Porter & Johnson 

• Associate, February 2007- October 2008 

Served as a member oftbe litigation practie<: group in Memphis, Tennessee. Represented corporate targets of 

government investigations. 

Offieeoftbe United States Attorney, Western District of Tennessee 

• Assistant United States Attorney, December 2002-Jaauary 2007 

Managed federal criminal investigations and prosecutions inWJlving finaneial crime. false claims, immigration, 

health eare fraud, nareotics, fueanns, and postal crimes. Investigated the first human trafficking case in 

Tennessee. Diretted federal grand iUJY investigations and collaborated with federal law enfon:ement agenei~ 

Supervised the work of a Special Assistant United States Attorney assigned to investigate criminal activity on 
66 


72418026.eps

the local navy base. Served as lead counsel in felony jury trials in federal court. Prepared appellate briefs and 

argued before the United States Court of Appeals for the Sixth Circuit 

Office oftbe Te~~cessee Artorney Gelleral 

• Alsisttnt Attorney Genera~ Consumer Advocate and Protectioo Division, Oetober 2000-December 

2002 

Setved on the special multi·state task forte to investigate the 2000 recaU of Bridgcslono'Fireslone tires and 

rollover accidents involving Ford Explorers. Deposed corporate officers and engineers. Drafted subpoenas, 

document requests and briefmg materials. Served as task force rep=ntative at United States Congressional 

hearings. Retained oational.ly recognized eJ<perts. Negotiated national senlemeots. 

• Alsisttnt Attorney General, Civil Rights and Claims Division, 1999-2000 

Managed approximately 190 cases, induding hearings before the Tennessee Claims Commission, one federal 

bench trial, and one federal jury trial. P!l!Clice included federal and s!Btecourt appearances, pre-trial 

conferences, depositions, trial preparation and client contact Supervised the handling of small docket claims 

assigned to the Civil Rights and Claims Division. 

United Stak$ House of Representadves 

• Investigative Counsel, 1998-1999 

Served as counsel during the Government Reform and Oversight Comminee's special investigation into 

campaign fimdtaising activity during the 1996 federal election Drafted subpoenas. Assisted with dcpo5itions 

of hearing witnesses. Prepared briefing materials for bearings. Dra.ftedsection of offiCial Congressional report. 

United States Senate 

• Legal Intern, Septeml>er 1997-December 1997 

Interned forthe Govemmenul Affairs Committee's special investigation into campaign fundraising activities 

during the 1996 federal election campaign. Reviewed and summarized documents, assiSled with witness 

preparation and depositions, and prepared briefmg books. 

EDUCATION 

1997 Juris Doctor, University of Memphis School of Law 

1994 B.S. Political Science; Murray State University, Cwn Laude 

PROFESSIONAL DEVELOPMENT 

Graduate of Lincoln Leadership Iostltute at Gelt)1burg 

Graduate of ClGIE Tralnlog lustitute at American University 

Management Concepts Budget Execudoo 

BAR ADMISSION 

Tennessee 1998 
67 


72418027.eps

SIII!C!eiTJtl!t to Banldn& Commltttt <luestlonnflre-Statement of Qualjfkatlons 

I am proud to bt a ~•19<1 pubic setvant, illd to have focused my Qlffr on <Mrsi&flt and enforcetntnl 

I have been fortllnate to wort neart; ewry angle of a government inwstigation in a leadersl\lp role-as 

counsel lOt congressional committees, as a state and federal prosecutor, and as inwstlgativecounsel for 

multiple IGs. 

I bqan my catttr as a VOilr'C lawytts assisting in i~M.Stigations f01 <Mrlicht comm~tffS for both tile 

House and the Senate. As a federal prosecutOtand an Assistant Attomey General in Tenoe~.t 

investigated and p<osewted human traffickin& bank fraud, dr~~i and firearms violations, tax fraud, and 

Fortune 500 CO/lSt.lmt( protection violation~ I also rep<esented the government In dvil rights li!Cation.l 

briefly left tile government after p<osecutfrccases forytarsand spent time in the pdvatf sector. But I 

was quickly drawn back 10 sovemment ser<ke, and my experience as a prosecutOt and Investigative 

counsel made me a natural fotforOIG wort. 

WortJrcat tile OfflctoflnspectorGeneral for the Posui Service, the Troubled Asset Relief Program 

(TAAP), and u.s. Department of HousirC and U~ Oewlopment has instilled in me a deepapp<eciiltlon 

for the critical role p~ by Inspectors general. And my experience at multiple IGs has ilumlnated for 

me how cllallenglng tt Is to lead OIGs.lt Is difficult to bt an OIG that produces relevant, actionable wort 

p<oducts while maintai~ng independence wtth a budget that requires us to do more with less. 

The issutsOIGs face are not unique, and tile Otpartmentswe are a part of face the same issues on a 

much larserSC31e.l believe that the best way to be an effective Inspector Generalis to bt a wry 

prominent piece of the agency's leadership structure. Our time Is too limited and our resources too 

scarce to miss the mart. Ensuring we focus our efforts propert; starts wtth regular and effective 

communication wtth departmental leadenllip. 

lam also a firm believer in the need to focus our efforts on the most scnificant management challenges 

HUD faces. In April of 2016,1 was handpicked to lead the new Off(e of Special Inquiry w~hln HUD OIG. 

Our team Is multi-disciplinary-comprised of attorneys, inYestlgators, and aud~ors- and we were 

aeated to address the spedal types of man~Ctment ~llerces that ~ry organil>tion and agency 

must face. We focus on 5Cnlficant risks to HUO's finances, integrity, and reputation by focusi'c on (I) 

Internal threats induding senior official misconduct and leal<s of nonpubr~ (often market·moving) 

information, and (2) entetprise-level risk to critical financial systems, which may be Internal 

manacement of risk 01 external conduct dettinentalto the function of the p<ogram. 

In this senior staff role, I also lead a worting group that was aeated to address some of ~UDOtG's rno5t 

significant Internal challenges- how to ensure our products are making a difference in HUD's mission 

and how to btner ensa1e our stakeholders at all !eve~. As the Adlng As~stant Inspector General for 

OSI,I haYe pined an appreciation for tile dl3tle'1fS HUD 00! in nnanagjlg its risb, and the challe~ts 

all OIGs faces in bri~'l& to life new ways to aeatively att!OO the risks that our agencies need help 

with. 

At times, OIGs must be prepared to throw ewrythlng they have at a p<oblem to stop the proverbial 

bleeding. As Otpuly and Ollef lnY!Siigativt Counsel at SIGTAAP, we deploved an orpnlutlon of 

lawyers. ct!tninal investigators, and analysts to illvesti&ate emergJoa. complex frauds in the financial 

system. We had to leam the frauds as they developed because the programs were new -it was a 
68 


72418028.eps

tafleted reSJlClnse to an unforeseen fi~I'GI crisis unlike any before it. Ont of the ueatest keys to our 

S~Xcess was allocating resources appropriately to ensure our team had a chance at combatting the 

complexities of these new, nkhe cases. 

My tum of lawyer:~ and investigators was Instrumental in presenting hundreds of cases for prose<ution. 

When I departed after nearly fivt yws, over 100 defendants were sentenced to a variety of crime 

indudl~ TAAP-related fraud, and bll11ons wtre retunntd to the gove1m1ent As a member of serior 

staff, I attended key case brief~ dnfted budget requests, and supeMsed the staff \Mt contributed to 

OIK~rtedy l!jlOfU !OCo'1feSS. I also revamped 01Ktr3i.W. procram totnSIJre Wt OI.Kteatnsof 

speml agents and lawyers benefited from l~ns leanntd in the field as well as our many sucasses in 

the courtrooms around the country. 

At SIGTAAP, the senior staffs' attention to detail gave us inslgl1t into the data of our agency's work, and 

we became a data-driven leadership team. We were date-driven on budget and we devoted major 

resourm to techoologv.lt brought huge returns, as we had a small staff that contributed significantly to 

major cases and we deYeloped erpertise in areas that other OIGs laded. 

I also have erperiecnd wortq In an OIG that is on an rllland: ike the Postal Sel'lice. When an agency 

has a unique lfgal and regu1atory hrnewort, its IG must be also be unique to add real vakle.l joined 

USPS OIG shortly after it assumed jiJrisd'l<tlon over many areas that had previously been worl.ed by the 

Postallns~ction Service. As an attorney for USPS-OIG, I helped develop our Investigative programs and 

training to combat internal mail theft, embeulement, worlctr:~ com~nsation fraud, and whlstleblower 

reprisal. 

Each of these roles have demanded that I exhibit independence and integrity. Each shaped me 

pe<~onally and professionally and ultimately prepared me for the rolt of lnspeelot Gtner.~l. I am 

honored to be conside~d for this pclsition. I have attached a copy of A!sume dtta~ time frames of 

myeiCpeflence. 
69 


72418029.eps

BOARD OF PROFESSIONAL RESPONSIBILITY of!H 

SUPREME COURT OF TENNESSEE 

IAHOYL OlrM£TT 

CIWP-..w!Y-

--

CCNTYOQP~CQ.IIIEL 

Ra.T,. ttWft c.:TIIOI~ASIIIIMCI 

u.&.aALOIAITAif 

--

TO WHOM IT MAY CONCERN: 

Re: Vain Rae Oliwr 

BPR No. 018831 

10 c.ou..: OOM, !1m 210 .........,_11027 (11~1$1·11011 

(8011)_1. 

F""(lll)317.-

-.l>ptoO<V 

Mud!8,2018 

KMIO........._ 

II!M!N~­ AIAIIO.JOHNSOII 

WUJAIIC....,.,. 

.. ,.__ 

EJia)t81.1M!lW.mttii'I'K 

............ WI1JS 

---

On Deam.ber 18, 197S, lhe TCI!DtSSt:t SupraDe Coull eslablisbed lhe Board of 

Professional Rtspoosibili!y of lhe SUprane Court of Tennessee to supervi9e lhe c:oaduct of 

attomeys U=ed to practice law io this Slate. 

This is w certify that the attorney refereuced above was issued a liceuse to practice law iD 

lhe State ofTeanesscc oo J811ll.U)' 14, 1998. This attorney's lic:ense is CUimllly acti.e and ill 

good~ 

EDclosed for )'OUr review is a report geuenud from CJUr cae roaagemeol system. A 

bid report illdicetes tbal CJUr office has DMr opmed m invesliplive file 011 this attomey. 
70 


72418030.eps

Disciplinary History Report 

OOver, Valeria Rae 

No complaints on file 

As ot. 3/a/201811:15:40 Ml 

018831 

Pogo 1 ol1 
71 

PREPARED STATEMENT OF DINO FALASCHETTI 

TO BE DIRECTOR, OFFICE OF FINANCIAL RESEARCH, DEPARTMENT OF THE TREASURY

JULY 24, 2018 

Chairman Crapo, Ranking Member Brown, and Members of the Committee, it is 

an honor to appear before you as the President’s nominee to serve as Director of 

the Office of Financial Research. 

I want to introduce my wife, Suzanne, and want to acknowledge other incredible 

people who cannot be with us today. 

Betty, Suzanne’s mom, is packing up her home in Chicago for a move to Montana. 

She will be a great constituent for what many call ‘‘the last best place.’’ My brother 

Dominic and his partner Greg are watching on the Committee’s website; work in 

Chicago did not allow them to join us today. 

I also want to acknowledge several people who are no longer here, but continue 

to be a great source of love and wisdom—Suzanne’s dad, Rich, as well as my mom 

and dad, Myrna and Dominic. 

My parents are the reason I am here. Growing up in South Chicago, my grade 

school was a tough place. Tough enough that my mom—a substitute teacher—and 

my dad—a high school teacher—saw early on that I was headed toward a dead end. 

Unfortunately, a better school district looked beyond my parents’ reach. 

Mom and Dad stretched their budget to the end, and then more, so that my brother and I could grow up in a much safer neighborhood and attend much better 

schools. They could not have pulled it off without the confidence of local bankers 

who provided the support necessary to enable my parents to do what was right for 

their family. 

My high school brought together kids from very different backgrounds. I sat between two young men—one would graduate and go on to Yale, while the other was 

already in a gang. 

My experience growing up is a powerful illustration of the importance of a loving 

family and access to financial services. Absent either one, I easily could have have 

continued down a dead end. With them, I was able to earn a business degree and 

a doctorate in economics that gave me access to a rewarding career. 

My career in business, academia, and Government has prepared me to lead the 

Office of Financial Research, and to ensure that it efficiently and effectively provides 

the high-quality financial data and analysis that Congress intended. However, it is 

my upbringing that taught me why this mission is so important. 

If confirmed, I look forward to working with this Committee and with the other 

members of the Financial Stability Oversight Council to promote a more resilient 

financial sector so that all Americans, wherever they might have started, have reliable access to the kind of financial hand up that helped my parents realize their 

dreams. 

I am honored to be here today and look forward to addressing your questions. 

72 


72418031.eps

STATEMENT FOR COMPLETION BY PRESIDENTIAL NOMINEES 

Name: Falascbetti 

(l.a<t) 

Position to which nominated: 

DiDo 

(firsl) 

Director, Office of Financial Researth 

Dominic 

(Olhet) 

Date of nomination: TBD 

Date of birth: May 1, 1967 Place of birth: Chicago Heights, 11 

(Day) (MOIII!I) (Year) 

Marital Status: M FuU name or spouse: Suzanne Marie Falascbetti 

Name and ages or cbUdren: NA 

Education: 

Institution 

WashingJon University in 

StLouis 

Uni1·ersi1y of Chicago 

llldiana University 

Dates 

attended 

1995-99 

1991-94 

1985-89 

Degrees Dales of 

received degrees 

PhD Decl999 

MBA w/ High Honon JUD 1994 

BS with Distinction Dec 1989 

Donors 

and awards: 

List below all scholarships, fellowships, honorary degrees, military medals, honorary 

society membenbips and any other special recognitions for outstanding service or 

acbievement. 

Washington Universitv im St Louis 

• Center in Political &onDmy DisseJtalion Fellow 

• John Stuart Mill Graduaie Fellow 

• John M. Olin Fellow 

University of California at Beri<eley 

• Robert Wood Johnson Scholar in Health Poli<y Research 

Stallfprd University 

• W. Glenn Campbell and Rita Ri~pbell National Fellow 

Memberships: List below all mernbenhips and offices held in professional, fraternal, business, 

scholarly, 

civic, charitable and other organizations. 

Organization Office held (if any) Dates 
73 


72418032.eps

Theta Chi; Rush Chairman; 1986-89 

American Institute of Certified Public Accountants (AICPA); No offices held, 1990-93 

Employment rec:ord: 

name 

List below all positions held since college, including the title or description of job, 

of employmen~ location of work, and inclusive dates of employment. 

Chltf Economist 

U.S. ~. Commiftee on Financial Services- Washington, DC 

Senior Research Fellow ami 

Director of Dutreacll for Financial and Economic Policy 

Metcatus Center at George Mason University-Allington, VA 

Sptelal Consultlnt 

Economists lticoipomtsd-San Francisco, CA 

Executive Director 

~Itt and Environment ReS681Ch Center-Bozeman, MT 

Senior Economist 

CoundJ of Ecooomic Advisers- The WMe House 

Professor of Law, Economics, and Finance 

Flctida Slate University. Montana Slate Unive!sily. Seal1/e Universly 

Manager of Corporate Finance 

Staff and lead Aud~or 

Undergraduate Intern 

PepsWnerK;as Inc. (formerly. IC Industries Inc.}-Chicago. IL 

Jun 2015-Present 

Jan 2014 -May2015 

Jul2006- May 2015 

Jui 2012 -Jan2014 

Jui2005-Jun 2006 

Jan 2000 - Jun 2012 

Jun 1991 - Sep 1993 

Jan 1990-May 1991 

Aug 1988- Dec 1988 

Government 

experience: List any experience in or di~eet association with Federal, State, or local governments, 

including any advisory, consultative, honorary or other part time service or positions. 

• Chief Economist for the House Committee on Financial Services, 20 IS -Present 

• Senior Economist for the President's Council of Economic Advisers, 2005 - 2006 

Published 

Writings: List the titles, publishers and dates of books, articles, reports or other published materials 

you have written. 

f. Polilical ECOI!OIIIy: Critic8/ Concepls (2011 ). London: Routledge Major WOO<s Series (sd~ed with Andrew Rutten 

and Norman Sohofield). 

• Volt. Theoly: Social Choice and Elections 
74 


72418033.eps

• v~ 2. ElecOOns and lnslitutKJns 

V~ 3. Politics, Law, and Ecooomic Plllfotmanre 

• v~ 4. Governance 

2. Delooctalic Govemance and Eronomic Perfonnance (2009). New Yaoc Springer-Ve~ag. 

3. Money, Financial Intermediation, and Govemance (2008). Edward Elgar PubriShing. Wrth Michael J. Orlando 

(Federal Reserve Bank of Kansas City), and lorewotd by Antoine Martin (Federal Reserve Bank of New York). 

Peer-reviewed and professional articles 

1. Come Together, Over the Fed? Bi-partisan proposals for pti<:e-slabiity may do better than inaeased oversight 

(2015). The HiU, Mardl3 (with Chad Reese). 

2. The EC011011lcsand POOticsofGood Leadels (2014). e21: EcooomicPolicies for the 21" Cenfuly, November3. 

3. Put the Market Back in Real Eslate (2014). U.S. News and WOIId Repoll, October 14. 

4. Hidden Costs: The Precautional}' Prindple, and Risks of Clean El1ergy Policy (2013). In Rober! Asahina (ed~or) 

LessonsAboot Growth from the States, the Nation and Abroad. Dallas, TX: George W. Bush lnstiMe. 

5. Does Climate Cllange WOfl}' You? How About lnsuranoe to Cover~ Consequences (2013). Foibes, April25 (with 

Terry Anderson). 

6. Alld~or lndepeOOence and Earnings Quality: Did Salba~ey go too Fat? (2013). Economists Ink: A Bliel 

Analysis of Policy and Litigation, SpeQallssue, Janual}'. 

7. A Sex-Difference in Risk·Talcing and Promotions n Hiefardlies: Evidenoe from Females in Legislatures (2012). 

Lead article n the JoomaJ of Law and Ecooomics 55(3):4n-502. 

8. Dodd-Frank Puts New Risk in Business, Fed Decision-Making (2011). 8/comberg Government, JanU81}' 31. 

9. Dodd-Frank Financial Reform: WllllnaeasedAooountabilityat Corpo~atioosand the Fed Weaken Business 

J\J~ments and Price S!ability? (2011 ). InSights, Center for Leadf~Mip Formation, Albers School of Business, 

Winter. 

10. Dodd-Frank Financial Reform: Noo-Market Risks and Strategies (201 0~ Economists Ink: A Blief Anelysis of Policy 

and Litigation, FaD. 

11. Dodd-Frank and Board Governance: New P~licaf.legal Risks to MoMtaly Policy and Business Judgments? 

(2010~ BanWi!g and Financial Setvices Policy Repo1129(12):1-7 (\lith Ridlard Fidei and Fred Karfinsky). 

12. An Information Markel Proposal for Regulating Systemic Risk (2010). University of Pennsylvania .Joumal of 

Business Law 12(3): 849-98 (with Matthew Bevl~e and Michael J. Orlando). 

13. SEC v. Goldman Sadls: P~iticaf.l.egal Risks and Eronomic Strategies for Litigatoo and Transaction Planners 

(2010). Ecooomists Ink: A Blief Anelysis of Policy and Litigation, Sp<ing. 

14. Audnorlndependence and the Qualfiy of Information in Fi11811Cial Disdosures: Evidence for Malkel Disciplif1e vs. 

Saltanes-Ox!ey Proscriptions (2010). American Law and Economics Review 12(1):39-68 (with James Brown and 

MicllaGI J. Orlando). 

15. Sharellolder Democracy and Corporate Governance (2009). Review of BanWi!g and FmnciaJ Law (Boston 

University SdiOO of Law) 28:553-80. 
75 


72418034.eps

16. KWe Want LO\'I"Prioed lion1e<YM1ers IIISUran<:e, We Need Poitical !W.IIISUran<:e (2009}. Orlsndo Sentnel, 

January 29 (wrtll Chris1opher ~JouWass). 

17. Can Lobbying PreventAnticompetitive Out canes? Evidence on Consumer Monop5ony in Tele<:onVnuOO!tions 

(2008). Journal of Coolpetitioo Law and Erooomics 4(4):1065-96. 

18. Rl)(jtjll!llhe Fed's Boat (2008). Hoover Dig9st (4):47-52 (ltith Midlael J. Orlando). 

19. Vv1len Detici1s Make Sense (2008). Hoover();ge.st (3):72·5. 

20. Does a Hosj)i1al's Profit Status Ailed its Operational Scope? (2008). Re'liew of lndusllial Olganization 33(2): 

129-59. Awalded Besl Paper by a Junior Aihrot by the Industrial OrgariZation S«iety ('Mth Marco Caslalleda). 

21. ~Health EJ(pendilll"es. Nationallrmne. ard Institutions for Private Property (2005~ Eccnomics & 

Politics 17(3):391-429. 

22. Culling the Dividends Tax ... and Corporate GoYemanee Too? (2005). Coip(v"ate Ownership & Control 3(2):31-4 

(ltith Michael J. Orlando). 

23. Constraining Rational Clloice: Allocation Versus Efficiency and the Origin of Commitment Problems (2004). In 

IIWin Morris, Joe Oppenheimer, and Karol Sol1an (eo"rtors) Politics fromAnarchytoDemoctaey(W. 110.131}. Palo 

Alto: Slanford Law and Politics (ltith Gary Miller). 

24. Optimization in the Production of Governance Selvices: Lessons for the Regulation of Auditor Independence 

(2004). Finanei~e Studievereniging Rottetriam (FSR} Forum 6(2):16-23 (wrtll Michael J. Orlando). 

25. Contributions to the Encyclopedia of Healthca!9 Mallag6fll8nl (2004). Michael J. Stahl (editor). Thousand Oaks, 

London. New Delhi: Sage Publicatiorls (wrtll Steve Parsons). 

26. Credible Commitments and Investment Do CheOO on lhe.Ablity or 111Cef1tive for OppOOunlsm Matter? (2003}. 

Eronom;: /nquily 41 (4):661).74. 

27. Is Auditor Independence Endogenous? Evidence and Implications for Pl!blic Policy (2003). Research Division 

Wor1<ing Paper03-13, F~eral Reserve Bank of Kansas City (wrtll Michael J. Orlando). 

28. Can Theoreticaly Latent Groups ln~nce Policy Decisions? The case of Telecoinloonicalions Po/'rcy (2003). 

Journal of Law. &mmics, and OlganiZ800n 19(1):83-105. 

29. Golden Patachules: Credible Commitments or Evidence of Shirking? (2002). Jouma! of Coiporafe Finance 8(2~ 

159-78. 

30. Does Partisan Helilage Matter? The case of the Federal Rese!ve (2002). Journal of Law. Eooocmics. and 

Olganilati01118(2):488-610. 

31. Book review of Usha Haley's (2001) Mlltin8tional ~in Political Environments. New~. London, 

Singapore, ard Hens Kong: WOOd Sdentific. Pl!b!ished in the 20021ntemational Joumal of 0tglllliz.alional 

Analysis 10(3):290-2 . 

. 32. Constrailing Leviathan: Moral Hazard and Credible Cornm.'1ment in Constitutional Desilln (2001 ). JoumaJ of 

7lie«etica1Mitics13(4):389-411 (wrtllGaryMi!ler). 

PoHtical 

Affiliations 
76 


72418035.eps

and activities: List memberships and ofli~ held in and servi~ rendered to all political parties or 

election committees during the last 10 yeazs. 

Political affiliation: Republican 

Political 

Conbibulions: Itemize all political contributions of$500 or more to any individual, campaign 

organization, political party, political action committee or similar entity during the last 

eight y·eazs and identify specific amounts, dates, and names of recipients. 

November 28, 2016, Senator Ben Sasse (Sasse PAC), SSOO 

QuaUfi«tions: State fully your qualifications to serve in the position to which you have been named. 

(attach sheet) 

Future employment 

relationships: I. lndi>eate whether you will sever all connections with your present employer, business 

finn, association or organization if you are confirmed by the Senate. 

Potential conflicts 

or interest: 

Yes 

2. As far as can be foreseeo, state whether you have any plans after completing 

government service to resume employrnen~ affiliation or practice with your previous 

employer, business firm, association or organization. 

No 

3. Has anybody made. you a commitment to a job after you leave government? 

No 

4. Do you expect to serve the full term for which you have been appointed? 

Yes 

I. Describe any financial at13llgernents or deferred rompensatioo agreements or other 

continuing dealings with business associates, clients or customers who will be 

affected by policies which you will influence in the position to which you have been 

nominated. 

None 

2. List any investments, obligations, liabilities, or other relationships which might involve 
77 


72418036.eps

Civil, criminal a.nd 

investigatory 

actions: 

potential conflicts of interest with the position to which you have been nominated. 

None 

3. Describe any business relationship, dealing or financial transaction (other th1n tax 

paying) which you have had during the last I 0 yem with the Federal Govemmeo~ 

whether for yoUISelf, on behalf of a clien~ or acting as an agen~ that might in any 

way constitute or result in a possible conflict of interest with the position to which you 

have been nominated. 

None 

4. List any lobbying activity during the past ten years in which you have engaged in for 

the pUipOSe of directly or indirectly influencing the passage, defeat or modification 

of any legislation at the national level of government or affecting the administ111tion 

and execution of national law or public policy. 

None 

S. Explain how you will resolve any conflict of interest that may be disclosed by your 

responses to the items above. 

NA 

1. Give the full details of any civil or criminal proceeding in which you wene a defendant 

or any inquiry or investigation by a Federal, State, or local agency in which you 

were 

the subject of the inquiry or investigation. 

NA 

2. Give the full details of any proceeding, inquiry or investigation by any professional 

association including any bar association in which you wene the subject of the 

proceeding, inquhy or investigation. 

None 
78 


72418037.eps

Falaschetti- Statement of Qualifications for OFR Director 

Throughout my career in corporate fmance, academia, and goverrunen~ I 

have developed research-based insights to inform decision-making at the 

highest levels. In my business career, I managed a billion-dollar money 

market portfolio, foreign currency exposures, and corporate valuations. As a 

professor of economics, law, and finance, I developed a highly ranked 

research program that explored how institutions at the intersection of 

economics, politics, and law affect households and businesses. At the 

President's Council of Economic Advisers and the House Financial Services 

Committee, I provided senior government officials with practical economic 

analysis on a wide range of topics including systemic financial risks. 
79 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR BROWN 

FROM ELAD ROISMAN 

Q.1. You stated in your testimony that, ‘‘Throughout its history, 

the dedicated Commissioners and staff of the SEC have worked to 

preserve confidence as our markets grew and evolved. To continue 

this, the SEC must examine and reexamine its rules, regulations, 

and guidelines to ensure that they are still working as intended to 

accomplish the SEC’s mission.’’ 

SEC Rule 10b-18, which provides publicly traded companies a 

safe harbor when repurchasing their shares, was issued in 1982, 

and the practice of stock buybacks has evolved considerably since 

then. For example, for the 248 companies in the S&P 500 continuously since 1981, share buybacks have gone from consuming 2 percent of their net income that year to nearly half of it in the period 

from 2004 to 2013. Moreover, in recent years, many of the large 

publicly traded companies have returned more than their net income to shareholders, in large part through significant stock 

buybacks. 

Given the dramatic increase in stock buybacks since Rule 10b-18 

was implemented, do you believe the rule merits reexamination to 

determine if it is still working as intended to accomplish the SEC’s 

mission? If not, why? 

A.1. As a general matter, I believe it is important for the SEC to 

review its rules to ensure that they are furthering the SEC’s mission. As you note, the rule was first promulgated in 1982 and was 

last updated in 2003. Stock buybacks have been shown to be an efficient way to return profits to investors and have been a tool used 

by companies for decades. One justification often used to support 

stock buybacks is that companies should return money to investors 

when they do not have a better use for that money, thus enabling 

investors to redeploy that capital into other investments. As you 

noted, stock buybacks have increased over the past several decades 

and some have argued that it has led to a decrease in a company’s 

ability to innovate and invest for the future and is potentially also 

an area of abuse where executives inappropriately benefit rather 

than stockholders. The debate about the appropriate use of 

buybacks, whether it incentivizes short-termism or needs more disclosure is currently ongoing and robust. 

Given the time since the rule was updated, the change in the 

markets, additional data and research, as well as concerns raised 

about the rule, I believe there is merit to reexamining it. If confirmed, I would look forward to discussing this topic with my fellow 

Commissioners, the SEC’s expert staff, and interested parties to 

see what, if any, changes they believe are appropriate for review. 

RESPONSES TO WRITTEN QUESTIONS OF 

SENATOR MENENDEZ FROM ELAD ROISMAN 

Q.1. In 2009 the SEC adopted a rule requiring publicly traded companies to disclose more information on director selection and diversity. However, because the rule failed to actually define diversity, 

the disclosures are vague and provide little information on actual 

board diversity. Last year, the SEC’s Advisory Committee on Small 

and Emerging Companies submitted recommendations to then ActVerDate Nov 24 2008 11:49 Oct 12, 2018 Jkt 046629 PO 00000 Frm 00083 Fmt 6602 Sfmt 6602 L:\HEARINGS 2018\07-24 NOMINATIONS\HEARING\32320.TXT JASON
80 

ing Chair Piwowar recommending that the Commission amend the 

rule to include ‘‘disclosure regarding race, gender, and ethnicity of 

each board member/nominee as self-identified by the individual.’’ In 

June, Chair Clayton told the House Financial Services Committee 

that he expects the SEC to move forward with a revised rule at 

some point in the future. 

Do you think the rule should be updated so that investors have 

access to more meaningful disclosures such as the racial, ethnic, 

and gender compositions as well as any efforts or strategies to improve board diversity? 

A.1. I believe that diversity is important and benefits organizations. Without prejudging a potential rulemaking or other Commission action, which the Chairman indicated the SEC would move 

forward on in the future, I will note that I believe it is important 

for the SEC to review its disclosure rules to see whether they are 

providing material information to investors. If confirmed, I would 

like to meet with Director Pamela Gibbs, the head of the SEC’s Office of Minority and Women Inclusion, to get her perspective on the 

issue and what she has seen as successful policies to promote diversity at the SEC as well as what she has learned from SEC regulated entities. I would also like to discuss this issue with the SEC 

staff and all interested stakeholders to see what changes they believe should be made to the existing diversity disclosure to provide 

investors more meaningful information. 

Q.2. If confirmed, will you commit to looking into this issue? 

A.2. If confirmed, I commit to looking into this issue. 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR WARNER 

FROM ELAD ROISMAN 

Q.1. Consolidated Audit Trail (CAT): I have been a strong supporter of the SEC’s creation of the Consolidated Audit Trail (CAT). 

I believe that, in order to properly oversee markets, it is vital that 

our regulators be able to reconstruct trading activity and discover 

weaknesses and nefarious activity. I have also been frustrated by 

the snail-like pace that this vital tool has been implemented, a 

frustration that Chairman Clayton recently echoed in March at a 

Securities Industry and Financial Markets Association (SIFMA) 

conference in Orlando, Florida. Chairman Clayton urged firms to 

comply with data sharing requirements and told the audience of 

stockbrokers that, ‘‘the main markets regulator should have access 

to a forensic trail that enables us to access what happened if a 

market event occurred.’’ 

Do you believe CAT is a vital tool for the SEC? 

A.1. I appreciate your leadership on this topic and share your belief 

that the SEC needs to have a tool to adequately oversee the markets and promote investor confidence. I agree that the CAT can be 

such a vital tool when it comes into existence. The SEC should 

never be in a position like it was after the Flash Crash where it 

took weeks, if not months, to ascertain the cause of market disruptions. 

Q.2. How can the SEC or policymakers encourage firms to comply 

with the data sharing requirement of the CAT? 

81 

A.2. If confirmed, I would like to discuss this with the SEC staff 

and fellow Commissioners to see what they think could additionally 

be done to encourage firms to comply. I believe that the SEC, or 

the self-regulatory organizations, which submitted the CAT NMS 

Plan, have sufficient authority to require the trading information 

from firms, but would want to discuss further with the SEC staff 

if I am confirmed. I will note that there have been concerns raised 

about the collection of personally identifiable information as part of 

the data sharing requirement. If confirmed, I would like to discuss 

this topic with the staff and Commissioners to ensure that the CAT 

does not require information that is not necessary to further the 

SEC’s mission and that the collected information can be protected. 

Q.3. Human Capital Disclosure: As the global economy continues 

to transition to a 21st-century knowledge-based economy, effective 

human capital management will be increasingly critical to a firm’s 

ability to innovate, adapt, and compete. Chairman Clayton reflected on the importance of adequate human capital disclosures in 

April 2018 at a House Appropriations Subcommittee on Financial 

Services and General Government hearing, where he stated that he 

‘‘would like to see more disclosure from public companies on how 

they think about human capital.’’ Yet the SEC’s Regulation SK requires few human capital management disclosures from public. 

Will you commit to working to increase human capital management disclosure requirements? 

A.3. I believe, as you have previously stated, that the American 

workforce is one of the greatest assets in our economy. The American workforce, the rule of law, and American innovation are the 

reasons our markets are the greatest in the world and our economy 

is the strongest. I believe that it is important for the SEC to constantly review its disclosure regime to see what needs to be improved to provide investors with material information for them to 

make informed investment decisions. There is a concept release on 

updating Regulation SK, and I do not want to prejudge future 

Commission action with respect to human capital management disclosure. However, if confirmed, I would look forward to engaging 

with interested parties on such disclosure as well as reading the 

public comment suggestions on how to improve the existing disclosures on human capital management and other important matters. 

RESPONSES TO WRITTEN QUESTIONS OF 

SENATOR CORTEZ MASTO FROM ELAD ROISMAN 

Q.1. Multiple rules mandated by Dodd–Frank remain incomplete, 

including rules pertaining to executive compensation, employee and 

director hedging, clawbacks, or incentive-based compensation for 

large financial institutions. 

If confirmed, will you support finishing rulemaking that is mandated by Wall Street Reform for the SEC? 

A.1. I will support finishing such rulemakings. I believe that the 

SEC must complete all Congressional mandates including those 

mandated by the Dodd–Frank Wall Street Reform and Consumer 

Protection Act. 

82 

Q.2. While cryptocurrencies offer an innovative way to conduct 

transactions, I am concerned about the use of cryptocurrencies as 

an investment vehicle. 

Where do you foresee the SEC’s involvement in overseeing 

cryptocurrency, particularly in conjunction with the CFTC? 

A.2. I believe that the SEC should continue to work with the CFTC 

to help oversee the cryptocurrency markets. The SEC has regulatory authority over assets (e.g., exchange traded funds linked to 

cryptocurrencies) and initial coin offerings that are deemed securities. Additionally, the SEC has authority over market participants 

that transact in such securities (such as brokers, dealers, and investment advisers), market professionals that advise on such transactions, including securities lawyers and accountants, as well as 

certain platforms for trading digital assets. I believe it is important 

for the SEC and CFTC to have a collaborative approach to overseeing cryptocurrencies and related assets in order to provide clarity to investors, market participants, innovators, and the general 

public about the securities and commodities laws and regulations 

covering these commodities and assets. To date, the SEC and 

CFTC have (1) issued joint statements on cryptocurrencies and related assets to bring transparency and integrity to the markets, (2) 

highlighted the need to set and enforce rules that foster innovation 

while promoting market integrity and confidence, and (3) brought 

charges for violations of the law to prevent and stop fraud in the 

offer and sale of digital assets. Such work should continue, especially with respect to educating the public and enforcing the law. 

This ultimately furthers the SEC’s mission to protect investors, 

maintain fair, orderly and efficient markets, and promote capital 

formation. 

Q.3. Should cryptocurrencies have adequate disclosures and investor protections? 

A.3. It is important that a security overseen by the SEC has adequate disclosures and investor protections, this includes 

cryptocurrencies and related products that are securities. 

The SEC has highlighted the importance of adequate disclosure 

and investor protections for digital assets in its DAO Report of Investigation Pursuant to Section 21(a) of the Securities Exchange 

Act of 1934, recent SEC enforcement actions involving digital assets, SEC investor alerts, and speeches and statements by staff and 

members of the Commission to help clarify what the SEC thinks 

are areas of concern. If confirmed, I would look forward to working 

with my fellow Commissioners and the SEC staff to continue to 

promote adequate disclosures and investor protections with respect 

to digital assets and cryptocurrencies. I would also work to continue to provide clarity to market participants so that they understand the rules that will be enforced, thus enabling innovation 

while promoting market integrity and confidence. 

Q.4. Should cryptocurrencies have the same protections and rules 

against market manipulation and market fraud as bonds and 

stocks? 

A.4. I believe that if a cryptocurrency asset is deemed a security, 

the investor protections and rules against market manipulation 

and fraud should be consistent with the existing rule set. I believe 

83 

that it is important for the SEC to recognize new innovations in 

the markets and try to adapt its rules when appropriate. The SEC 

has been both educating the public about the rules and regulations 

that govern digital assets as well as bringing enforcement actions 

to ensure that bad actors, market manipulation, and fraud are 

being rooted out. It has also been working with state regulators 

and other agencies to try and target fraudulent initial coin offerings and crypto-asset investment products so that the public and 

fraudsters know that this is an area the SEC is focused on and 

takes seriously. This is important, and I would look forward to continuing this, if confirmed. 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR JONES 

FROM ELAD ROISMAN 

Q.1. I introduced legislation earlier this year, the Expanding Access to Capital for Rural Job Creators Act, with my colleagues Senator Heller, Senator Heitkamp, and Senator Kennedy, focusing on 

capital formation for rural small businesses. 

The bill would expand upon the work of my colleagues to expand 

the work of the SEC’s Small Business Advocate. 

What do you see as the unique challenges, or opportunities, for 

both small business owners and investors in rural businesses? 

A.1. I believe that small business owners and investors are the 

backbone of this country, and I have been concerned about impediments to their sustainability and growth. Unfortunately, some of 

the challenges that these entrepreneurs and investors face is that 

many of the rules that they must comply with have a one-size fits 

all structure and do not take into account their business model. Additionally, and in some cases it can be more pronounced for rural 

businesses, access to capital can be much more limited. Given these 

challenges, I believe it is important for the SEC to review its rules 

to see whether they are appropriately taking into account the size, 

type, and resources of small businesses and see whether changes 

should be made with respect to SEC matters such as capital raises 

and debt financing, including as it relates to Crowdfunding and 

Regulation A offerings. If confirmed, I would look forward to meeting with rural business owners and investors, interested parties, 

the SEC’s expert staff including the SEC’s Small Business Advocate, once the position is filled, to hear their ideas on how to address the challenges facing rural businesses. This is a matter of 

particular interest to me, and I would be happy to work with you 

and others on this issue to ensure that the concerns about small 

businesses and in particular rural businesses are heard. 

Q.2. The SEC recently moved forward with a proposal to potentially limit whistleblower payouts. 

Can you tell me if you believe whistleblowers have been a benefit 

to SEC enforcement? 

A.2. Based on what I have reviewed from public SEC enforcement 

actions, I believe that whistleblowers have provided the SEC with 

important information which has led to cases against bad actors. 

There is a proposed rulemaking on this subject, so I do not want 

to prejudge the rulemaking. If confirmed, I would look forward to 

84 

discussing the benefits of whistleblowers to the SEC’s enforcement 

program with the SEC’s staff, including the head of the SEC’s Office of the Whistleblower, as well as my fellow Commissioners and 

all interested parties. Additionally, I would look forward to reviewing the comment file on the proposed whistleblower rule to learn 

from the public what people believe the SEC got right and what 

could be improved. 

Q.3. Do you believe that strong financial incentives have helped entice whistleblowers in coming forward with highly sensitive information? 

A.3. I believe that strong financial rewards incentivize whistleblowers to come forward, which can help root out fraud and illegal 

activity. As you noted, there is a proposed rulemaking on this subject, so I do not want to prejudge the rulemaking. If confirmed, I 

would look forward to discussing this topic with the SEC’s staff, including the head of the SEC’s Office of the Whistleblower, as well 

as my fellow Commissioners and all interested parties. I would also 

look forward to reviewing the comment file on the proposed whistleblower rule to learn from the public what people believe the SEC 

got right and what could be improved. 

Q.4. Can you broadly describe your priorities for the SEC’s investment advice rule will be? 

A.4. Without prejudging the proposed Regulation Best Interest and 

related rulemakings, I believe that it is important for the SEC in 

finalizing a rule related to the provision of investment advice to 

look at issues such as whether the rule: 

• Allows investors the ability to maintain and have access to financial advice; 

• Provides appropriate disclosure so investors understand their 

relationships with financial advice providers, including conflicts of interest and how those are addressed; 

• Is business model neutral, meaning that it permits consumers 

to receive different types of services and optionality, promoting 

investor choice and competition; and 

• Promotes the SEC’s three part mission, including protecting investors. 

Appropriately addressing these issues would be a priority for me. 

If confirmed, I would look forward to discussing the proposed rule 

with my fellow Commissioners, the SEC’s staff, and all interested 

parties. Additionally, I would look forward to reviewing the comment file to see what the public believes the SEC got right in the 

proposed rulemaking and what could be improved. 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR BROWN 

FROM MICHAEL R. BRIGHT 

Q.1. You served as a Senior Vice President at PennyMac from 2015 

to 2016. In 2017, PennyMac was Ginnie Mae’s largest issuer, making up 11 percent of Ginnie Mae’s total issuance. You are also a 

former employee of BlackRock, an affiliate of one of PennyMac’s 

largest equity holders. 

85 

If confirmed, how can we be certain that your previous employers 

will not unduly influence your decisions as President of Ginnie 

Mae? 

A.1. For the past year, as Chief Operating Officer of Ginnie Mae, 

I have treated all issuers fairly and made decisions based on the 

agency’s statutory responsibilities and the facts before me. My previous employers have never influenced my official actions before 

and I assure you they never will. If confirmed, that would continue 

to be my practice. I firmly understand that any perceived 

favorability would be detrimental to my ability to lead, and so I 

take great care to ensure that all issuers, investors and other 

stakeholders are treated the same, both in practice and in perception. 

My ethics agreement—which I signed upon my nomination—further spells out some precise steps I must take to avoid any actual 

or apparent conflicts of interest if I am confirmed to the position 

of President of Ginnie Mae. 

Q.2. Following a March 22, 2018, hearing in this Committee, I 

asked questions for the record of the Department of Housing and 

Urban Development (HUD) Secretary that still have not been answered more than 4 months later. I am concerned that this lack of 

responsiveness to the Committee’s requests could become a pattern 

at HUD and throughout the Administration. 

If confirmed, will you provide timely, substantive responses to all 

Committee inquiries? 

A.2. Yes, absolutely. 

Q.3. In Ginnie Mae 2020, you outline three elements of your strategic plan for Ginnie Mae. The final element, a ‘‘Strong Focus on 

Innovation’’, states that Ginnie Mae is part of HUD discussions 

about whether to develop a loan-level credit risk transfer program 

or pilot. You state that any credit risk transfer program would 

have to be ‘‘economically, legally and operationally feasible.’’ 

Is Ginnie Mae still actively pursuing a program or pilot to test 

new credit risk transfer options? 

What metric would Ginnie Mae use to determine that a credit 

risk transfer program is economically feasible? 

What impact would any credit risk transfer proposal have for 

homeowners and renters whose loans or rental units are financed 

through Ginnie Mae? 

Do you intend to engage with Members of Congress and relevant 

stakeholders, including financial institutions, investors, and consumer advocates, before you initiate a credit risk transfer program 

or pilot? 

A.3. Many private institutions have come to Ginnie Mae and offered ideas for how some Federal programs in our security could 

leverage private credit risk transfer (CRT) to improve their financial risk conditions. Ginnie Mae itself collects only a 6-basis point 

guarantee fee, which would not be enough for Ginnie alone to engage in credit risk transfer. Other partner Federal agencies, however, have expressed some interest in concept, and Ginnie could 

conceivably play a facilitating role. 

For any CRT program to work, however, it would have to put 

both the Federal insuring agency, Ginnie Mae, and the borrower in 

86 

a better financial condition and be equally available to lenders of 

all sizes. It is possible that some structures could meet these criteria, but we have not seen any yet. 

Any credit risk transfer program—pilot or otherwise—would follow a full regulatory rulemaking process and begin with substantial engagement between Ginnie Mae and Members of Congress. 

Q.4. In your testimony before the Committee, you said that you 

thought that the papers you coauthored with former Federal Housing Finance Agency Acting Director Ed DeMarco were ‘‘vague’’ on 

whether to maintain Fannie Mae and Freddie Mac’s affordable 

housing goals. But in ‘‘Affordable Rent and Access to Homeownership’’, published in May 2017, you wrote that the affordable housing goals had ‘‘shortcomings’’ and proposed ‘‘alternatives’’ (see p. 

12). You also wrote that whether ‘‘those goals contributed to the financial crisis is controversial’’ and cited to Peter Wallison’s dissent 

to the Financial Crisis Inquiry Commission’s report on the causes 

of the financial crisis (see p. 12). The paper then goes on to propose 

‘‘replacing the old regime and its many flaws’’ (see p. 13), though 

it does not require that a new regime serve as many households. 

Do you still support replacing the affordable housing goals? 

A.4. Thank you for the follow up questions on the important topic 

of affordable housing. In the paper I coauthored with Ed DeMarco, 

we proposed some ways to improve upon the existing goals. I think 

that it’s important to regularly evaluate how we can improve upon 

the programs we have to provide more effective and efficient access 

to affordable housing. 

I have never personally supported eliminating the affordable 

housing goals—and I do not support their outright elimination now. 

In the paper I noted that there are some implementation challenges with the current version of the housing goals that make 

them less effective at achieving their desired outcomes. Namely, 

Fannie Mae and Freddie Mac seller-servicers would often hold back 

pools of loans they knew to be ‘‘goals rich’’ in order to get premium 

pricing from the GSEs as the GSEs sought to meet their goals. 

This favorable pricing was then not passed on to borrowers, undermining the core purpose of the housing goals. 

While Ginnie Mae has no direct oversight of housing goals, in my 

time at Ginnie Mae as COO I am and will remain squarely focused 

on ensuring continued support for low-income access to affordable 

housing. I do that primarily by protecting the integrity of our program and the value of our security, which translates directly into 

lower rates for FHA, VA, and USDA borrowers. 

I believe there is an affordable housing crisis in this country and 

every Federal agency, including Ginnie Mae, should be thinking 

constructively about ways to address that crisis. 

Q.5. Do you believe that the affordable housing goals were a primary cause of the financial crisis? 

A.5. No, I do not believe that housing goals caused the financial 

crisis. 

Q.6. The recent Ginnie Mae 2020 report outlines a number of steps 

that Ginnie Mae has taken or will take to manage evolving 

counterparty risks that were outlined by the HUD Inspector GenVerDate Nov 24 2008 11:49 Oct 12, 2018 Jkt 046629 PO 00000 Frm 00090 Fmt 6602 Sfmt 6602 L:\HEARINGS 2018\07-24 NOMINATIONS\HEARING\32320.TXT JASON
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eral and Ginnie Mae itself. However, Ginnie Mae 2020 does not address the staffing challenges at Ginnie Mae that were noted by a 

Ginnie Mae-commissioned KPMG audit, the Inspector General, and 

the Government Accountability Office. 

How many full-time equivalents (FTEs) does Ginnie Mae currently employ? Of those FTEs, how many are contractors and how 

many are staff? 

Do you believe that Ginnie has sufficient staff to adequately 

oversee its counterparty risks and daily operations? 

As noted in Ginnie Mae’s Annual Report, Ginnie Mae’s issuer 

base has changed significantly over the past 10 years. How will 

changes in the type and number of Ginnie Mae issuers as you continue to refine and strengthen Ginnie Mae’s risk framework? 

A.6. We have 150 full-time employees at Ginnie Mae, and approximately 400 contractors. The vast majority of our contractors are at 

two subservicers (Selene and Carrington) that subservice loans for 

a runoff portfolio of loans Ginnie Mae assumed during the financial 

crisis. That book of loans began at about $35 billion in unpaid principal balance. It is now at $4 billion and continues to decline. Our 

second largest contracting presence comes from Deloitte, which 

supports Ginnie Mae with data analytics. Additionally, Ginnie Mae 

relies on Bank of New York Mellon for some aspects of bond administration. 

As I mentioned during the hearing, Ginnie Mae would benefit 

from additional flexibility to reward highly technical staff, who we 

have difficulty retaining and attracting due to the differences in 

pay scale among Ginnie Mae, the Federal Housing Finance Agency, 

Fannie Mae, Freddie Mac, and bank regulators. Ginnie Mae is the 

only one of these institutions subject to the General Schedule 

payscale. We have a reasonable number of employees, but attracting and retaining technical talent is critical, and we have lost some 

just in the one year I have served as COO. 

Additionally, as discussed during the hearing and highlighted in 

a number of recent whitepapers, our shifting issuer profile means 

we need even more of our resources allocated to monitoring the financial health of our issuers (e.g., their ability to remit principal 

and interest). This includes keeping a close eye on the value of 

their mortgage servicing rights, which serve as Ginnie Mae’s collateral in the event of an issuer default. 

Q.7. Your current title at Ginnie Mae is Executive Vice President 

and Chief Operating Officer. 

Have you had any other title(s) while working at Ginnie Mae? If 

so, on what dates were those titles held? 

A.7. I also held the title of Acting President while the Administration pursued candidates for the role of President. I ceased to hold 

that title when the Administration began the vetting process for 

me as a potential nominee. The dates I was Acting President were 

July 11, 2017, to November 16, 2017. 

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1https://assets1c.milkeninstitute.org/assets/Publication/Viewpoint/PDF/Affordable-Rentand-Access-to-Homeownership2.pdf 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR MORAN 

FROM MICHAEL R. BRIGHT 

Q.1. Thank you for addressing the IRRRL churn issue during the 

hearing. Beyond your stated comments, does the VA mortgage program have any unique risk characteristics that you are paying particular interest to? 

A.1. The VA program only covers 25 percent of the loan balance, 

whereas FHA and USDA cover 100 percent. This additional risk, 

however, is counteracted by the fact that VA loans tend to demonstrate incredibly low delinquency rates, even during economic 

downturns. 

Q.2. The VA mortgage program as an earned benefit for 

servicemembers, past and present, that has performed well over 

the years. In your view, is Ginnie Mae a partner to the VA in ensuring that our veterans and active-duty personnel are able to take 

full advantage of this benefit? 

A.2. Ginnie Mae is absolutely an enthusiastic partner of the VA in 

helping to ensure veterans have access to this earned benefit. We 

also believe strongly that the actions we, Congress, and the VA 

have taken in recent months help ensure the VA loan program remains viable for future veterans. 

RESPONSES TO WRITTEN QUESTIONS OF 

SENATOR MENENDEZ FROM MICHAEL R. BRIGHT 

Q.1. In your 2017 paper entitled ‘‘Affordable Rent and Access to 

Homeownership’’, you advocate for a 10-basis point user fee on all 

mortgages securitized in the new system to generate funding for affordable home ownership and rental options. 1

Is it true that under your proposal, the fee would not be available to support access and affordability until a certain reserve 

threshold has been met? 

How long would it take to meet that threshold? 

Wouldn’t that actually make affordable rental housing worse off 

in the short term while we are building the reserve and during a 

crisis than the status quo, which at least gives 4.2 basis points to 

the Housing Trust Fund and the Capital Magnet Fund? 

In your proposal, you state this structure would create a ‘‘natural 

countercyclical buffer’’ where funding of affordable homes and 

home ownership options would be curtailed in a crisis. Please explain why we should wind down access and affordability in an economic downturn? Didn’t the last crisis demonstrate that having a 

countercyclical source of affordable loans and refinancing options 

was critical to keeping the mortgage market afloat? 

A.1. A great deal of research points to the fact that the portion of 

American incomes spent on housing continues to rise to what I believe are unsustainable levels. This is particulary true for low- and 

moderate-income Americans. I believe every Federal agency, including Ginnie Mae, has an obligation to examine what it can do 

to address this problem. That is what I have done for the past year 

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at Ginnie Mae and that is what I am committed to continuing if 

I am confirmed. 

The paper I coauthored with Ed DeMarco included a 10-basis 

point access fee as one of its proposals to help ensure access to affordable home ownership and affordable rental housing for lowerincome Americans. In contrast to the current 4.2 basis point fee in 

statute, which only applies one time at the origination of a new 

loan, our proposed fee would be applied annually. The larger fee 

and annual application of the fee would generate roughly 10 times 

the total revenue of today’s one-time 4.2 basis point fee. 

Under our proposal, this 10-basis point annual fee was meant to 

augment a much-expanded duty to serve all markets at all times. 

In some ways, the paper was suggesting that there may be more 

robust ways of establishing rules for secondary market actors operating in a Government-subsidized system—rules that would be explicitly designed to ensure that the focus on the system remained 

on low- and moderate-income Americans. We proposed robust ‘‘anticreaming’’ rules as well. 

I have reread the paper since the hearing and I understand how 

it could leave the impression that the 4.2 basis point up-front fee 

would not accrue during the build-up of the new system. That was 

never the intent, and I am happy to clarify that, if there were to 

be reform, these funds should continue to be available throughout 

the transition process. 

As for the countercyclical buffer in our paper, the reserve fund 

was intended to serve the function you describe—to keep the mortgage market afloat during a downturn. The Government could 

draw on the reserve fund during a downturn to stabilize the market. The reserve fund is a better alternative to increasing affordable housing fees or guarantee fees in a crisis because increased 

fees could exacerbate the downturn and reduce access to affordable 

housing. 

Addressing the affordable housing crisis is a priority of mine and 

I am ready to work as a partner with you to do all we can to solve 

it. 

RESPONSES TO WRITTEN QUESTIONS OF 

SENATOR CORTEZ MASTO FROM MICHAEL R. BRIGHT 

Q.1. During your testimony during the Banking Committee, you 

testified on your tenure at Countrywide and Wachovia. You also 

testified that you would commit that lenders participating in programs through Ginnie Mae would be appropriately scrutinized 

under your leadership. 

How will you ensure that lenders whose mortgages are insured 

by Ginnie Mae are not engaging in predatory or abusive loan practices, like dual tracking, loan churning, or preventing refinancing? 

A.1. Given Ginnie Mae’s position in the value chain of mortgage 

production (e.g., securitization and bond administration after loans 

have been made) as well as the fact that we have no direct oversight authority over consumer credit law (that is, we cannot conduct on-site reviews of consumer protection issues), Ginnie Mae relies to a great degree on our partner Federal agencies to police bad 

behavior. However, when Ginnie Mae sees data suggesting behavVerDate Nov 24 2008 11:49 Oct 12, 2018 Jkt 046629 PO 00000 Frm 00093 Fmt 6602 Sfmt 6602 L:\HEARINGS 2018\07-24 NOMINATIONS\HEARING\32320.TXT JASON
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ior that might be questionable at best, we can and do make referrals to these partner agencies—the Department of Agriculture 

(USDA), Veterans Administration (VA), and Federal Housing Administration (FHA)—as well as the Consumer Financial Protection 

Bureau (CFPB). Over the past year, we have communicated directly with all these agencies on matters that appear to imply a 

form of predatory behavior. 

What Ginnie Mae can do, and has done in the past year, is look 

at trailing data of the performance of loans in our securities. When 

an issuer has performance that is materially outside that of its 

peers and when that performance threatens the health of our security, we can and have removed those lenders from our so-called 

‘‘multi-issuer pools.’’ When we did this, we were proactive in making our concerns knows to the VA, FHA, USDA, and CFPB and 

asked them for help. 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR BROWN 

FROM RAE OLIVER DAVIS 

Q.1. The Administration is pursuing significant changes that would 

limit the use of the False Claims Act. How does the HUD Inspector 

General use the False Claims Act today and how would any 

changes impact your work? 

A.1. The False Claims Act is an important tool in combating fraud 

against the Federal Government. The Department of Justice (DOJ) 

is the agency vested with authority to bring suit under the False 

Claims Act (FCA), but HUD OIG investigations may be conducted 

jointly with DOJ or serve as the basis for suits and/or settlements 

advanced under a theory of liability under the FCA. 

HUD OIG will continue to conduct its work and refer matters to 

DOJ for appropriate action, regardless of any changes made to the 

way the FCA is used. With that said, if confirmed, I would seek 

a seat at the table with DOJ and HUD to discuss future utilization 

of the FCA to ensure that HUD OIG’s perspective is represented 

adequately. 

Q.2. There have been several allegations of ethics violations by 

Trump administration political appointees, including some at HUD 

under Secretary Carson’s leadership. I am not asking for you to 

comment on any of these allegations, but I am interested in your 

willingness to act as an impartial investigator. Do you pledge, if 

confirmed, to conduct investigations into allegations of misconduct 

in an impartial manner, without regard to whether the subject is 

an appointee of the Administration? 

A.2. Yes. If confirmed, I pledge to be an independent Inspector 

General that is impartial, unbiased, and objective in fact-finding 

and reporting. As I stated in my opening statement before the 

Committee, if confirmed, I will not allow the Department to direct 

or obstruct my investigations. It is my firm belief that politics have 

no place in the decision making of an Inspector General. I will be 

independent and impartial in investigations of all HUD officials, including political appointees. 

Q.3. The Office of Inspector General serves an important role in investigating allegations of misconduct and conducting audits. Often, 

91 

these reviews are retrospective. In your view, can the Office of Inspector General play a role in proactively assisting HUD and its 

grantees, participants, counterparties, and partners to implement 

best practices? If so, how would you go about that? 

A.3. Yes. I believe that IGs can be extremely effective by engaging 

proactively. Helping the Department avoid losses is the most efficient way to achieve the purposes of an IG. We can be effective 

proactively through communication and innovation. Engaging with 

HUD to ensure we are up to speed on issues arising in their programs is critical to doing meaningful, proactive work. For example, 

HUD OIG has recently done capacity reviews of grantees that will 

administer HUD CDBG-DR funds. If confirmed, I will seek to do 

more of these type of reviews of CDBG-DR grantees, but also in 

other HUD programs. 

I also believe we must find new ways to do our work so that we 

can effectuate change and push HUD forward towards success. Utilizing data and cutting-edge technology can help IGs move swiftly 

and focus our efforts. If confirmed, I will work to make HUD OIG 

a data-driven workforce that plans our work in areas where the 

data tells us we should be looking. 

RESPONSES TO WRITTEN QUESTIONS OF 

SENATOR MENENDEZ FROM RAE OLIVER DAVIS 

Q.1. Since Secretary Carson was confirmed, there have been multiple allegations of HUD employees facing retaliation and reprisals 

for speaking out about various misconduct ranging from spending 

decisions to overpayments to contractors. If confirmed, will you 

commit to fully investigating and addressing any allegations of retaliation or reprisal directed at HUD employees? 

A.1. I will. Whistleblowers are the life-blood of IGs. We rely on 

their courage and dedication and, if confirmed, I pledge that my office will be as dedicated and courageous in efforts to defend and 

protect whistleblowers. We can achieve this through thorough investigation of allegations of retaliation and effective communication 

and collaboration with the Office of Special Counsel. Equally important is our communication with whistleblowers and HUD employees about the laws applicable to whistleblower retaliation and 

the process available to report potential retaliation. 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR WARNER 

FROM RAE OLIVER DAVIS 

Q.1. DATA Act: In November 2017, the Office of Inspector General 

completed a DATA Act Compliance Audit in accordance with the 

statutory requirements of the Digital Accountability and Transparency Act of 2014. That report made five recommendations to improve HUD’s compliance with DATA Act requirements. While the 

Department has made progress in these efforts, would you continue 

to devote appropriate resources to fulfill your oversight responsibilities under the law? 

A.1. Yes. If confirmed, I will ensure that our office has sufficient 

resources devoted to monitoring HUD’s compliance with the DATA 

Act and all Federal laws. If confirmed, I plan to coordinate with 

92 

HUD’s leadership early on to identify ways HUD can implement 

open recommendations related to its top management challenges, 

including the DATA Act recommendations from our 2017 report. 

RESPONSES TO WRITTEN QUESTIONS OF 

SENATOR CORTEZ MASTO FROM RAE OLIVER DAVIS 

Q.1. During the Trump administration, we’ve seen a number of 

Secretaries break ethics rules, including Secretary Carson. In addition to overspending taxpayer funds on redecorating, Secretary 

Carson has used his position to give his family members undue influence over policy decisions, and unfettered access to other Government officials, including those they have business before. I, 

along with several of my colleagues, have sent letters to the HUD 

OIG requesting investigation into Secretary Carson’s actions during his tenure as Secretary. 

Given the important role you’ve been nominated to, can we expect you to stand up to powerful political interests, like Secretary 

Carson? 

A.1. Absolutely. One of the priorities that I outlined to this Committee in my confirmation hearing was conducting thorough investigations of misconduct within, and affecting, HUD. This applies to 

any HUD employee, appointee, and individual or entity that is involved with or seeking involvement in HUD programs or platforms. 

Q.2. Will you commit to respond in a timely manner to requests 

for information from Members of this Committee, and the Senate? 

A.2. Yes. If confirmed, I will provide timely responses to every request made of HUD OIG. 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR BROWN 

FROM DINO FALASCHETTI 

Q.1. In 2017, the House of Representatives passed the Financial 

CHOICE Act, H.R. 10. At the time, you served as Chief Economist 

for the House Financial Services Committee. Section 151 of the 

CHOICE Act repeals the Office of Financial Research. Do you think 

the Office of Financial Research should exist? If so, was Section 

151 of the CHOICE Act a misguided provision in the bill? 

A.1. I believe the OFR should exist, and has a critically important 

mission. 

If confirmed, I will work to fulfill the OFR statutory mission to 

support the Financial Stability Oversight Council in fulfilling its 

purposes and duties, and promoting a more resilient financial sector by providing the FSOC firmly grounded, and data-driven, research it needs to evaluate and address risks to financial stability. 

Q.2. The Director of the Office of Financial Research has broad authority to set the budget and staffing levels at the agency. The 

agency is funded through assessments on systemically important financial institutions. The FY2018 and FY2019 OFR budgets drastically reduce the annual funding and staffing levels of the agency. 

Compared to FY2017 levels, the recent OFR budgets have cut funding by 25 percent and staffing by over 35 percent. If confirmed, 

would you reverse these budget cuts? 

93 

A.2. I understand there are efforts underway to reorganize the 

OFR. If confirmed, I will review these reorganization efforts to ensure that the agency has the appropriate resources and staff necessary to fulfill its statutory mission and support the Financial Stability Oversight Council. 

Q.3. In your confirmation hearing, you stated that the OFR Director does not have independence when it comes to setting the agency’s budget and that the decision is a ‘‘conversation with the Treasury Secretary.’’ Section 152(c) and (d) of Dodd–Frank states that 

the Director must consult with the Treasury Secretary when setting budget and staffing levels, but the final decision rests with the 

Director. Per your reading of Dodd–Frank, which official has final 

say over the OFR’s budget? If you disagree with the Treasury Secretary regarding the agency’s budget and staffing levels, will you 

defer to the Treasury Secretary or will you implement budget and 

staffing levels that you think are appropriate? 

A.3. Section 152(c) of the Dodd–Frank Act states the ‘‘Director, in 

consultation with the Chairperson, shall establish the annual budget of the Office.’’ Section 152(d) states that the ‘‘Director, in consultation with the Chairperson, may fix the number of, and appoint 

and direct, all employees of the Office.’’ If confirmed, and in consultation with the Chairperson—as directed by statute—I will implement a budget and make staffing decisions that allow the agency to fulfill its statutory mission and support the Financial Stability Oversight Council. 

Q.4. The Office of Financial Research recently published a proposed rule to collect additional data on the repurchase agreement 

(repo) market. According to the proposed rule, regulators would 

only have access to data on roughly 50 percent of the repo market 

after the new data is collected. This short-term funding market 

played a central role in the 2007–2008 financial crisis, as a run on 

these liabilities helped bring down investment banks Bear Stearns 

and Lehman Brothers—while causing significant stress at countless other institutions. Ten years after the financial crisis, it is 

troubling that regulators do not have the data necessary to clearly 

evaluate this market. Do you commit to implementing the proposed 

data collection and expanding its scope to provide regulators with 

a clear picture on 100 percent of this systemically important funding market? 

A.4. If confirmed, I will work with the other members of FSOC to 

evaluate data needs in order to fulfill OFR’s statutory mission, including evaluating the potential need for additional data collection 

in the short-term funding market. 

I will also commit to reviewing the proposed rule to determine 

if the size and scope of the information proposed to be collected is 

appropriately calibrated, and allows the OFR to fulfill its mission 

and support the Financial Stability Oversight Council. 

Q.5. One part of the OFR’s mission is to conduct long-term research on emerging risks to the broader financial sector. The agency was designed to be an independent source of such research— 

driven by data, not politics. How will you set the agenda for OFR’s 

research projects? Do you think OFR should take requests for reVerDate Nov 24 2008 11:49 Oct 12, 2018 Jkt 046629 PO 00000 Frm 00097 Fmt 6602 Sfmt 6602 L:\HEARINGS 2018\07-24 NOMINATIONS\HEARING\32320.TXT JASON
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search from the financial services industry? Do you commit to publishing rigorous, data-driven research, even if you may personally 

disagree with some of the conclusions? 

A.5. OFR’s core purpose is to serve FSOC and its member agencies. 

I believe the OFR’s mission is critically important in promoting a 

more resilient financial sector by providing the FSOC with firmly 

grounded, and data-driven, research it needs to evaluate and address risks to financial stability. If confirmed I will determine what 

research is needed based on an assessment of what will best serve 

the FSOC in fulfilling this mission in both the short-term and the 

long-term. 

My academic career taught me the importance of not pretending 

to know the answer to important questions before seeing the facts. 

Instead one must apply rigorous empirical analysis to see what the 

real world data show. 

Q.6. What will be your research priorities for the OFR, if confirmed? 

A.6. If confirmed, my first goal is to provide FSOC and its member 

agencies with the firmly grounded and data-driven research they 

need to evaluate and address risks to financial stability. Fulfilling 

this goal is important for robust economic growth and taxpayer 

protections. My second goal is to build out OFR’s foundational work 

to strengthen market discipline by increasing financial market 

transparency. Working toward this goal promotes financial stability 

and strengthens economic growth. 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR ROUNDS 

FROM DINO FALASCHETTI 

Q.1. Do you agree that the recent rule proposal on cleared transactions in the repurchase agreement market (RIN 1505–AC58) is 

broader in scope and seeks data fields beyond what is necessary to 

inform the FSOC according to the stated purpose explained in the 

accompanying release to the proposal? 

A.1. If confirmed, I will commit to reviewing the proposed rule to 

determine if the size and scope of the information proposed to be 

collected is appropriately calibrated, and allows the OFR to fulfill 

its mission and support the Financial Stability Oversight Council. 

Q.2. Would you be open to industry comment on how this proposal 

could be made less burdensome to the industry by revisiting both 

the scope and implementation timing for the proposal? 

A.2. According to the Federal Register, the OFR is receiving public 

comment on the rule until September 10, 2018. 

Q.3. If confirmed, how will you reconcile any future OFR 

rulemakings with the Trump administration’s efforts to streamline 

regulation and regulatory burdens? Further, if the OFR intends to 

collect additional data from the financial services industry given all 

the recent Government data breaches, how will you work to ensure 

privacy and appropriate security controls are in place around the 

data once received by OFR? 

A.3. Data security is of the utmost importance to the mission of the 

OFR. If I am confirmed, rest assured that I will take this responsiVerDate Nov 24 2008 11:49 Oct 12, 2018 Jkt 046629 PO 00000 Frm 00098 Fmt 6602 Sfmt 6602 L:\HEARINGS 2018\07-24 NOMINATIONS\HEARING\32320.TXT JASON
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1Savransky, Rebecca. ‘‘Trump Slashing Staff, Budget at Office of Financial Research: Report’’. 

The Hill. December 6, 2017. Available at: http://thehill.com/homenews/administration/363493- 

trump-slashing-staff-budget-at-office-of-financial-research-report. 

bility very seriously and will review the policies and procedures 

that are in place in order to determine if they are adequate to 

maintain the security of the data. Doing so is important to maintain the confidence of the entities from which the data are being 

collected and the confidence of the American people in our broader 

financial markets. 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR REED 

FROM DINO FALASCHETTI 

Q.1. As you know, OFR is designed not only to be an independent, 

data driven, deeply analytical, and apolitical research organization, 

but also to serve as an early warning system to identify risks before they snowball into another financial crisis. 

In a June 11, 2018, Yahoo! Finance article, the Chief Investment 

Officer of Global Fixed Income at Goldman Sachs Asset Management was quoted as saying the following: 

When the music stops I do think it’s going to be pretty 

ugly . . . We’ve sown the seeds for the next downturn and 

there’s a lot of similarities . . . After ’08 everyone was 

like, ‘I can’t believe we did all those very stupid things.’ 

But we’re doing them all over again. 

What are the one or two risks that you already know should be 

explored and will commit to explore comprehensively, if confirmed? 

A.1. First, I would want to learn more about how OFR’s own monitors and research rank such risks and the basis for those rankings. 

OFR employs a number of very capable researchers and support 

staff, and I would want to consult with the staff before providing 

any ranking. 

Second, we must always be vigilant about the potential buildup 

of risks to the financial system, such as the risks that could be 

posed by cybersecurity threats or overreliance on short-term wholesale funding. 

RESPONSES TO WRITTEN QUESTIONS OF 

SENATOR CORTEZ MASTO FROM DINO FALASCHETTI 

Q.1. President Trump has supported cutting OFR’s budget and 

staff by nearly 38 percent. 1

Do you support these cuts? 

A.1. I understand efforts are underway to reorganize the OFR. If 

confirmed, I will review these reorganization efforts to ensure that 

the agency has the appropriate resources and staff necessary to fulfill its statutory mission and support the Financial Stability Oversight Council. 

Q.2. Since the beginning of the Trump administration, FSOC has 

voted to deregulate, or backed down on systemically important designations, including a designation for AIG and agreeing to dismiss 

the SIFI designation of MetLife. The Office of Financial Research 

96 

2Flitter, Emily. ‘‘Decade After Crisis, a $600 Trillion Market Remains Murky to Regulators’’. 

New York Times. July 22, 2018. Available at: https://www.nytimes.com/2018/07/22/business/ 

derivatives-banks-regulation-dodd-frank.html. 

is responsible for supporting FSOC in their activities, including 

analyzing data and performing long term research. 

Do you believe there are any current risks in our financial system that pose challenges to our short-term or long-term economic 

health? If so, what are they? 

A.2. If confirmed, I will review data, and work with FSOC member 

agencies to identify possible sources of systemic risk that could impact our economic health, including potential cybersecurity risks 

and those related to overreliance on short-term wholesale funding. 

I look forward to working with members of this Committee and 

your staff to outline these issues, including in OFR’s Annual Report 

to Congress as required by statute. 

Q.3. A recent report by the Treasury Department advised FSOC to 

make SIFI designations for nonbank financial institutions based on 

complex activity analysis, as opposed to utilizing the $50 billion 

consolidated assets threshold. However, I am concerned by a recent 

New York Times article that highlighted gaps in regulators’ awareness of the derivatives market, particularly in regards to American 

banks’ exposure to foreign markets. 2

Do you support FSOC shifting away from asset threshold to activities analysis to inform SIFI designations? 

A.3. Examining institutions based on activities will allow the FSOC 

to better understand the specific risks an institution may pose to 

the financial system, thus improving the process for monitoring 

risk to the financial system. If confirmed, I will work to provide the 

FSOC with firmly grounded, data-driven research that will aid in 

this process and allow them to evaluate and address risks to financial stability. 

Q.4. Do you believe that current data reported to regulators accurately depicts nonbank financial institutions’ risk exposure? 

A.4. While I cannot speak for the specific data collection efforts of 

regulatory agencies, I believe the OFR’s mission is critically important in promoting a more resilient financial sector by providing the 

FSOC with firmly grounded, data-driven research it needs to evaluate and address risks to financial stability. If confirmed I will determine what research is needed based on an assessment of what 

will best serve the FSOC in fulfilling this mission. 

Q.5. Do you believe financial regulators have the staff and resources needed to request and analyze data on derivatives trades? 

A.5. While I cannot speak for other regulatory agencies, if confirmed I will work in consultation with the Chairperson of FSOC 

to ensure that OFR has the appropriate resources and staff necessary to fulfill its statutory mission and support the Financial Stability Oversight Council. 

97 

RESPONSES TO WRITTEN QUESTIONS OF SENATOR JONES 

FROM DINO FALASCHETTI 

Q.1. The work conducted by the Office of Financial Research has 

many audiences—academics, industry, policymakers, and the public. 

One of those critical roles is producing research that can help inform legislators as we examine financial markets, now a decade 

after the financial crisis. 

Having experience in Congress, what are some areas of opportunities you can see for OFR to expand its relationship with lawmakers, while maintaining its independence? 

A.1. If confirmed, I look forward to working with you, other Members of Congress—especially those on the Senate Banking and 

House Financial Services Committees—and the other FSOC members to promote a more resilient financial sector. I sincerely look 

forward to building and maintaining a constructive dialogue with 

members of both chambers and both sides of the aisle while respecting OFR’s statutory mission. As a Congressional staffer, I very 

much appreciate the role of Congress and the importance of keeping Congress informed about these important issues affecting 

Americans across the country. 

98 

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

LETTER SUBMITTED IN SUPPORT OF THE NOMINATION OF ELAD 

ROISMAN AND DINO FALASCHETTI 


72418301.eps
99 

LETTERS SUBMITTED IN SUPPORT OF THE NOMINATION OF MICHAEL 

R. BRIGHT 


72418302.eps

[B NATIONAL 

ASSOCIATION of .,,.,., REALTORS' 

A.0\'00\CY GROUP 

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July 24,2018 

Chairman fichael Crapo 

Senate Banking Committee 

538 Dirksen Senate Building 

Washington, DC 20510 

Ranking Member Sherrod Brown 

Senate Banking Committee 

538 Dirksen Senate Building 

Washington, DC 20510 

Dear Chairman Crapo and Ranking Member Brown: 

The 1.3 million members of the National Association of REALTORS® support 

rhe nomin:ttion of M.ich:.el Bright 2s President of the Go\•emment Nation-'.! 

Mortgage Association (GNMA). NAR bclims he has the expertise and 

credentials to serve the agency weU. 

Mr. Brigh~s extensive fmance lr.tckground makes him an ideal candidate to lead 

GNMA. His experience, bolh in and our of the go\·emmem, gi1•e him a broad 

undersranding of capital markets and the housing industty. As a former Hill 

sraffer, Mr. Bright has experience ~;th !he policy issues affecting GNMA as weU 

as mortgage and financial markers. 

The National Association of REAL TORS® supports his nomination and urges 

the Senate Banking Committee to approre his nomination. 

Sincerely1 

Elizabeth 

~q~ Mendenhall 

2018 President, National Associotion of REALTORS~ 

cc: Senate Banking Committee 
100 


72418303.eps

Sincerely, 

Eli>abcrh ~lendenhall 

2018 President. National Associarion of REAL TORS~ 

Page2 
101 


72418304.eps

The Honorable Michael Crapo 

Chairman 

1\~, uu 

COMMUNITY 

Home Lenders Association. Inc. 

2101 Wi~on Boullvar<l Suite 610 

Arlington, VA 22201 

July 23, 20t8 

The Honorable Sherrod Brown 

Ranking Member 

U.S. Senate Committee on Banking, 

Hoosing, and Urban Affairs 

U.S. Senate Committee on Banking, 

H011Sing, and Urban Affairs 

239 Dirksen Senate Office Building 

Washington, DC 20510 

713 Han Senate Office Building 

Washington, DC 20510 

Dear Chairman Crapo and Ranking Member Brown: 

The Community Home Lenders Association (CHLA) writes to express oor support for the 

confirmation of Michael Bright as President of the Government National Mortgage Association 

(GNMA). 

GNMA is a critically irnponant program for low and moderate income, minority, and 

underserved homebuyers. The program allows originators to securitize FHA, RHS, and VA 

mortgage loans, in order to access securities markets and provide affordable mortgage rates. 

CHLA is composed of small and mid-sized non-bank mortgage lender/serl'icers, also known as 

independent mortgage bankers (IMBs). In recent years, the 1MB share of GNMA has increased 

significantly, from 18% in FY 2009 to 78"/o in the first part ofFY 2018. This reflects both a 

strong increase in the 1MB market share of FHA loan originations, and also the issuance of 

GNMA securities by IMBs that previOIISiy securitized their FHA loans through banks, some of 

which have exited that market. Therefore, GNMA is also critically important to IMBs. 

CHLA believes that Mr. Bright has the experience and knowledge that is needed to run the 

program, with a background that includes an impressive stint as a committee staffer for a senior 

Senator on the Banking Committee, relevant work in the private sector, and most recently a full 

year as Executive Vice President and Chief Operations Officer at GNMA. A steady hand is 

needed at GNMA - and CHLA believes Mr. Bright is that steady hand. 

CHLA also believes that Mr. Bright has an appreciation for the importance of continued 

participation of a broad range of hundreds of different issuers in GNMA, in order to facilitate 

access to credit for homebuyers. 

Of coorse, GNMA should continue its important task of monitoring and supervising the net 

wonh and liquidity of its issuers, in order to run the program in a financially prudent manner. 

However, we would point out that GNMA has consistently been profitable, even during the 

darkest days of the 2008 Housing Crisis, and is projected to produce $1.7 billion in net profits in 

the current fiscal year, according to this year's HUD budget. 
102 


72418305.eps

Therefore, concerns abQUI financial supervision of issuers should be balanced with concerns 

about maintaining broad issuer participation, in order to serve consumer access to credit needs. 

We hal'e confidence that Mr. Bright will balance these important objectives as President of 

GNMA. 

Sincerely, 

COMMUNITY HOME LENDERS ASSOCIATION 
103 


72418306.eps

............... 

NAHB. 

HatlonaiAssodatlon of Home Bulldels 

120115111 S1ree1 WI 

~ton. DC20005 

T 800 368 5242 

F 202 266 8400 

WMY.nal'b.org 

July 23, 2018 

The Honora'ble Mike Crapo 

Chairman 

Un~ed States Senate Committee on 

Banking, Housing, and Urtlan Affairs 

239 Oir!(sen Senate Office Building 

Washington, DC 20510 

Government Affairs 

JamesW. Tobin Ill 

Exeartive y.,. Presidenl & Chief Lobbyist 

Government Alfai~ and CQ<Miunicalions Group 

The Honorable Sherrod Brown 

Ranking Member 

United States Senate Committee on 

Banking, Housing, and Urban Affairs 

713 Hart Senate Office Building 

Washington, DC 20510 

Dear Chaimnan Crapo and Ranking Member Brown: 

On behaff of the National Association of Home Builders (NAHB), I am pleased to 

offer our strong support for the nomination of Michael Bright to serve as the President 

of the Government National Mortgage Association (Ginnie Mae) at the Department of 

Housing and Urban Development (HUD). 

NAHB has wor1<.ed with Michael for much of his professional career, starting during 

his tenure as a financial policy staffer in the Senate, to his more recent work as 

director of the Mil ken lnst~ute s Center for Financial Markets, and now currently as 

the Acting President, Executive Vice President, and Chief Operating OffiCer of Ginnie 

Mae. Throughout his career in both the government and private sector, Michael has 

proven himsen to be both an expert in housing finance policy as well as an 

outstanding federal agency administrator and communicator. NAHB has full 

confidence in Michael for this Clitical poMion at HUD, and believes that he will bring 

his usual high-level policy experience and professionalism to Ginnie Mae. 

As housing goes, so goes the economy. To ensure the housing recovery continues, ~ 

is essential to have a leader like Michael at Ginnie Mae who is committed to 

promoting pro-housing policies that support homeownership and rental housing 

opportun~ies for hard-working American families. 

NAHB looks forward to working with Michael Bright in his role as President of Ginnie 

Mae in 2018 and beyond. 

Sincerely, qt]O 

James W. Tobin Ill 

CC: Members of the Un~ed States Senate Committee on Banking, Housing, and 

Urban Affairs