Waters criticized the GOP plan, spearheaded by Financial Services Committee Chairman Jeb Hensarling, R-Texas, during a speech Tuesday at the National Association of Federal Credit Unions congressional caucus, arguing that it seeks "a radical remake that is not viable."
"Housing finance reform must maintain an affordable 30-year fixed-rate mortgage, protect taxpayers by making any guarantee fully paid for, support affordable rental housing and importantly, ensure that all financial institutions including credit unions can equally participate," she said during the speech.
Hensarling's bill, called the Protecting American Taxpayers and Homeowners Act, would unwind Fannie Mae and Freddie Mac and remove a government guarantee from the secondary market. The legislation was introduced in July and passed the committee largely down party lines later that month, though questions now remain over whether the bill will move to the House floor, particularly after the issue was left off of a fall legislative agenda released by Majority Leader Eric Cantor late last week.
Democrats, including Waters, have been vocal in their opposition to Hensarling's bill, warning that it would undermine the 30-year mortgage and fails to help low-income borrowers and renters. During her remarks on Tuesday, Waters said she would pursue an "alternative approach" that aligns with a set of principles House Democrats released in July.
Waters said that her legislation would be "quite different" from Hensarling's bill, noting that it's still an open question whether that legislation has adequate support to move to the House floor.
Hensarling is said to be in ongoing talks with lawmakers outside of the banking panel, working to round up the necessary 218 votes for passage. While some in the caucus support his efforts to push a free market-oriented proposal, others are said to have concerns about removing the government guarantee against the wishes of numerous stakeholders, including the home builders and Realtors.
"As you know the PATH Act is not moving, it's not going anywhere, it's not been scheduled for the floor, and I think that it's because they don't have the support—certainly not from our side of the aisle and of course they're divided on the Republican side," the California Democrat told reporters after the speech.
But Waters did not provide details on what her bill will contain or when it would be unveiled. One key issue is whether her bill will include elements of legislation introduced by Sens. Mark Warner, D-Va., and Bob Corker, R-Tenn., which is a bipartisan attempt at GSE reform.
"The big question for the substance of her bill is whether it is similar to Corker-Warner, with more robust affordable and multifamily housing provisions, or does it just enshrine something closer to the status quo?" said Brandon Barford, a vice president at ACG Analytics.
He added that the principles put forward by House Democrats were "very much aimed at a middle-class audience" and not the "affordable housing groups that she has so long championed and been the voice for," calling it a "very measured document."
"The order of how things were ranked in it are also not necessarily reflective of what her personal priorities have been, which perhaps suggests she is trying to evolve as a ranking member and she knows that her best hope to rally the caucus and impact the debate is to drop the more left-leaning wish list of issues and focus on tangible outcomes for the middle class," Barford said.
While analysts said it's extremely unlikely the effort would come up for a standalone vote in the committee or on the House floor, legislation authored by Waters and other House Democrats could ultimately play into the formation of a final housing reform bill.
"The PATH Act needs to be moderated in order to be supported by industry groups or House Democrats. So for the House Democrats to have tangible language on paper that would reinforce the importance of the 30-year mortgage will help all parties move toward the medium-term goal, which is a conference committee," said Isaac Boltansky, a policy analyst for Compass Point Research & Trading. "Work by Congressmen like Waters will overall advance the effort."