Jonathan McKernan has been confirmed by the Senate as undersecretary for domestic finance at the U.S. Department of the Treasury. The 51-47 Senate vote followed strict party lines, with no Democrats in favor of confirmation.
McKernan, a former board member at the Federal Deposit Insurance Corp. (FDIC), will serve under Treasury Secretary Scott Bessent. The undersecretary role involves developing and coordinating the department’s policies and guidance in areas including domestic finance, fiscal policy and other related economic matters.
“It is an honor to continue my career in public service to the American People as Under Secretary of Domestic Finance,” McKernan stated in a press release from the Treasury Department. “I want to thank President Trump and Secretary Bessent for their confidence in me to further the economic agenda of this Administration as we look to accelerate this nation’s sustainable economic growth.”
Bessent called McKernan “an ideal leader for Treasury’s domestic finance portfolio,” adding that “he will play an instrumental role in strengthening our economy by clawing back the government overreach and excess that defined previous administrations.”
McKernan had previously been nominated by President Donald Trump to serve as director of the Consumer Financial Protection Bureau, but Trump withdrew that nomination after tapping him for the Treasury job. The consumer watchdog continues to be headed on an acting basis by Russell Vought, who also leads the White House’s Office of Management and Budget.
Industry takes
Mortgage and housing groups were quick to congratulate McKernan.
Scott Olson, executive director of the Community Home Lenders of America, praised McKernan’s “thoughtful approach to complex financial issues.” He said his trade association representing small and midsized independent mortgage banks looks forward to working with McKernan “on the many key housing and mortgage finance issues ahead, particularly those that impact community IMB lenders and the borrowers they serve.”
Other trade association leaders focused their comments on McKernan’s potential role in shaping the futures of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The Trump administration is currently weighing a plan to sell shares in the mortgage giants through an initial public offering.
“Importantly, Undersecretary McKernan will play a key role in the future of Fannie Mae and Freddie Mac (the GSEs),” Mortgage Bankers Association President and CEO Bob Broeksmit said in a statement. “We will work collaboratively with Treasury staff and the Federal Housing Finance Agency [FHFA] to develop and execute a careful and calibrated plan for the GSEs’ future in a way that avoids any market disruption or increased costs for borrowers.”
The American Land Title Association, in a statement congratulating McKernan, wrote that it “remains committed to continuing our collaboration with the Administration, including with Treasury, to promote a future for Fannie Mae and Freddie Mac that prioritizes market stability, protects consumers and preserves access to sustainable and secure homeownership.”
And David M. Dworkin, president and CEO of the National Housing Conference, released a statement saying that McKernan’s “leadership in bringing together a broad range of stakeholders to inform the Trump administration’s consideration of the future of Fannie Mae and Freddie Mac will provide important intellectual capital to ensure that the mortgage finance system, taxpayers and homebuyers across the country are well served.”
Fannie and Freddie updates
During an Aug. 27 interview with Fox Business, Bessent said the administration has discussed offering 3% to 6% of Fannie and Freddie’s stock as a public float. A Treasury spokesperson told The Wall Street Journal this week that it is working through a “deliberative process towards giving President Trump options.”
FHFA Director Bill Pulte, whose agency oversees Fannie and Freddie, has also been advising Trump on a potential IPO for the government-sponsored enterprises. He provided an update on social media Tuesday, writing that “it will be up to the President to decide what if any shares he wants to sell in any type of public offering.”
Pulte added: “He has not made a decision yet nor has he picked a lead bank.”
