While president-elect Donald Trump is still making selections for who will fill out his cabinet and other important leadership positions across the government, one outstanding question mark revolves around Ginnie Mae.
The government-owned company that oversees the mortgage-backed securities (MBS) program and its sizable portfolio did not have a Senate-confirmed president for the entirety of the first Trump term. But Michael Bright was nominated in 2018 while he was serving as the company’s acting president.
A protracted confirmation process ultimately led him to step down from the company in early 2019. He has gone on to serve as the CEO of the Structured Finance Association. In a recent interview with HousingWire, Bright discusses his perspective on the Senate confirmation process and where the political priorities were at the time for both major political parties.
Chris Clow/HousingWire: As someone who’s been involved with Ginnie Mae under the first Trump administration, how do you see the company’s leadership being developed within the first 100 days of the second term?
Michael Bright: It’s so hard to predict at this stage. We don’t yet know who the HUD secretary will be, and that’s going to be a critical factor. In my own experience, when I went through the process, I had to interview with the National Economic Council (NEC), with Secretary Ben Carson and HUD leadership. After that, you move on to the Presidential Personnel Office (PPO). Currently, the PPO isn’t set up, so there are a lot of major pieces still missing.
I’m not aware of anyone who’s expressed interest or is clearly connected with the transition team, and I haven’t heard any specific names being discussed. My hope is that when they do start interviewing candidates, they look for someone with a comprehensive understanding of the market.
Clow: Is there anyone in particular you’d like to see in the role?
Bright: There’s a tendency to consider candidates who are mainly connected to issuers or who have a narrower focus. I really hope they choose someone who also understands the investor’s perspective, given the importance of the MBS investment community to the functioning of FHA and USDA programs.
If I had any influence — which I don’t — I’d advocate for someone who grasps both the issuer’s and investor’s roles, because it’s such a large portfolio now. That’s what I’ll be keeping an eye on. I’m not trying to dodge the question, but without a HUD secretary or an NEC director, even if someone were interested in the Ginnie Mae role right now, they wouldn’t know who to approach. If this were four years ago and I was eyeing that job, there would simply be no one to talk to at this point.
Clow: What were the biggest impacts at Ginnie Mae during the first Trump term stemming from not having a Senate-confirmed president?
Bright: I was nominated, and I went through the Senate Banking Committee process, and then I was voted out of committee unanimously by a voice vote. But in 2018, at the time, the Senate still had a 30-hour rule for all nominations. So, what they did was force you to burn 30 hours of debate for a nomination. Now, what the Senate could do is, through unanimous consent, shorten that period to just a voice vote or a package vote.
Typically, in the past — like for my predecessor, Ted Tozer — most Ginnie Mae presidents go through the Senate on unanimous consent, unless they’re highly controversial. The theory is that if you get to that nomination point, you should be qualified. They all went through one Senate voice vote with a very short debate time.
In 2018, the Republicans were pushing federal judges as their main nominee set. They really wanted to get as many federal judges as possible. One of the tactics that then-minority leader (Chuck) Schumer used was not to waive the 30-hour rule for anyone, intentionally backing the trains up to slow down the Trump nomination machine, because they were upset at how much focus there was on federal judges. I just got caught up in that.
Clow: How close did you ultimately get to being confirmed?
Bright: In 2019, they changed that voting threshold to three hours, which helped to unblock a lot of the nominations from that first time. But for me, it was a difficult situation because when Congress ends between sessions — in 2018, going into 2019 — the whole process starts over. So, you have to redo everything — redo meetings, redo the Senate confirmation hearing, redo all the background checks.
It took almost a year, and I just thought it would be too strange to show up again at the Senate Banking Committee. You bring your family to these nomination hearings, and it would have been awkward to show up a second time and say, “You met my son last year; he’s a year older now.” There were just some idiosyncrasies that kind of happened.
Clow: Were there any practical differences between the authority you had on an acting basis and the authority you would’ve had if you’d been confirmed?
Bright: There are no differences between the power of an acting and a confirmed president. Operationally, I don’t think it had a negative consequence for Ginnie Mae, especially because I had the acting authority the entire time, and hopefully, I had the trust of the staff.
Where I think it maybe did have a decaying effect was that a lot of the civil servants at Ginnie Mae don’t really understand the nuances of politics; it’s not their thing. Some of them felt that it meant the administration was deprioritizing Ginnie Mae or that it wasn’t a priority for the Senate or the White House.
I had to do a lot of explaining that that’s not what was going on. What was happening was a battle over federal judges and Senate floor time, burning the clock on nominees. I was told explicitly by the White House, “Since you have the acting authority, you’re going to be toward the bottom of the list,” because I was already in the seat, which wasn’t the case for a lot of other positions. It was idiosyncratic.
Clow: Were there other internal impacts?
Bright: Operationally, it wasn’t a problem, but there may have been a morale impact for some people who saw it as a message that the institution wasn’t as important to the Senate, to HUD or to the White House as it should have been for a $2 trillion mortgage-backed securities portfolio.
I think I should have gotten a floor vote, so I agree with that sentiment. But I also understand that the Democrats at the time weren’t going to say, “We’re upset about federal judges, but we’ll table those concerns for Ginnie Mae.” That wasn’t going to happen. So, it’s not great to not have a confirmed person, but there are workarounds that we were able to use.