All Banking Committee Democrats Call on Bill Pulte to Reverse Illegal Decision to Eliminate FHFA Watchdog

All Banking Committee Democrats Call on Bill Pulte to Reverse Illegal Decision to Eliminate FHFA Watchdog

"You must publicly answer to Congress about your attempt to gut your agency's independent watchdog."

Text of Letter (PDF) | Text of OIG Letter to Bipartisan Senate and House Committees

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing and Urban Affairs Committee, alongside Senators Jack Reed (D-R.I.), Mark Warner (D-Virg.), Chris Van Hollen (D-Mary.), Catherine Cortez Masto (D-Nev.), Tina Smith (D-Minn.), Raphael Warnock (D-Geor.), Andy Kim (D-N.J.), Ruben Gallego (D-Ariz.), Lisa Blunt Rochester (D-Del.), and Angela Alsobrooks (D-Mary.), wrote to Bill Pulte, Director of the Federal Housing Finance Agency (FHFA), about his unlawful attempt to gut the agency's independent watchdog responsible for investigating mortgage fraud and Pulte's own misconduct. The senators called on Pulte to reverse course and fully fund the office. Congress created FHFA's OIG, and FHFA is statutorily obligated to ensure that OIG has the resources it needs to complete its mission. The letter follows an official notice from the FHFA OIG warning that Pulte's budget cut will "eliminate (the OIG's) capacity to effectively conduct criminal investigation of mortgage, bank, and other fraud schemes involving the entities FHFA regulates."

"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-a reduction of over sixty percent from the OIG's FY26 operating budget. The cut is so significant that it will immediately force the OIG to begin winding down its operations," wrote the Banking Committee Democrats.

"Despite the key role that the FHFA OIG plays in preventing waste, fraud, and abuse, you have reduced the office's budget to $20 million in FY27. That level of funding will impede FHFA OIG's ability to complete its statutorily required functions and make it impossible to conduct meaningful oversight of FHFA or the U.S. mortgage finance market," the Banking Committee Democrats continued. "The OIG has confirmed that the cut will effectively shutter its work, writing: 'We will be forced to reduce staffing by approximately 70-80% in FY 2027, which will result in the discontinuance of essentially all criminal investigations conducted by our Office of Investigations.'"

"Your decision is unacceptable and yet another example of this Administration's willingness to flout the law and evade accountability. It also indicates that FHFA is uninterested in finding and eliminating mortgage fraud - an issue that you have repeatedly claimed to prioritize at FHFA. We demand that you immediately reverse course and fully fund the FHFA OIG for FY27 with a budget no less than the OIG's original FY27 funding request." the Banking Committee Democrats concluded.

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