Senators Press FHFA To Reverse 60%-Plus Cut To Inspector General Budget
By CU Today Staff —
WASHINGTON — Eleven Democratic members of the Senate Banking Committee are pressing Federal Housing Finance Agency Director Bill Pulte to reverse a more than 60% reduction in funding for the agency’s Office of Inspector General, warning the cut would effectively shut down much of the independent watchdog’s work.
In an Oct. 1 letter, the senators, led by ranking member Elizabeth Warren (D-MA), called on FHFA to provide at least $57.6 million for the OIG in fiscal 2027 instead of the $20 million allocated by the agency
The OIG has warned Congress that funding at $20 million would require it to cut staffing by approximately 70% to 80% and discontinue essentially all of its criminal investigations. The office investigates mortgage, bank and other fraud involving entities overseen by FHFA, including Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Reuters reported the $20-million allocation is 64% below the amount included for the OIG in the White House budget submission.
“We write after receiving confirmation that the Federal Housing Finance Agency (FHFA) is unlawfully slashing the fiscal year 2027 (FY27) budget of its Office of Inspector General (OIG) to $20 million,” the senators wrote, adding that the reduction would make “meaningful oversight of FHFA or the U.S. mortgage finance market” impossible. Joining Warren were Sens. Jack Reed (D-RI), Mark Warner (D-VA), Chris Van Hollen (D-MD), Catherine Cortez Masto (D-NV), Tina Smith (D-MN), Raphael Warnock (D-GA), Andy Kim (D-NJ), Ruben Gallego (D-AZ), Lisa Blunt Rochester (D-DE), and Angela Alsobrooks (D-MD).
FHFA defended the reduction, saying it is intended to bring the inspector general’s budget and staffing more in line with peer agencies after FHFA adopted zero-based budgeting. The agency said the OIG had sought funding equal to about 16% of FHFA’s operating budget, compared with roughly 2% at other regulators, while OIG employees represent about 18% of FHFA’s workforce compared with an average of about 4% at peer agencies. Pulte said the change reflects “good financial stewardship,” while the Democratic senators contend FHFA has a statutory obligation to adequately fund its watchdog.
Originally reported by CU Today.