WASHINGTON — Senate Democrats are threatening to block an extension of a controversial spy powers law if the White House refuses to withdraw its appointment of Bill Pulte as the acting director of National Intelligence.

Senator Mark Warner, the top Democrat on the Intelligence Committee and a key vote on the extension, warned Majority Leader John Thune of the potential revolt, according to a person familiar with the discussion.

President Donald Trump on Tuesday announced that he was appointing Pulte – a loyalist who has used his perch as the nation’s top housing regulator to launch investigations into perceived Trump opponents – as acting Director of National Intelligence.

Warner and Intelligence Chairman Tom Cotton have been working for months to get a bipartisan deal to extend Section 702 of the Foreign Intelligence Surveillance Act before it expires June 12. Pulte’s appointment “doesn’t help” the deal, Warner said Tuesday. The Virginia Democrat’s warning to Thune was earlier reported by Punchbowl.

FISA Section 702 allows U.S. intelligence agencies to collect foreign nationals’ communications overseas. It has drawn criticism from privacy advocates on both the left and the right who argue that it facilitates warrantless surveillance of Americans in contact with foreigners. Warner is critical to getting Democrats on board with an extension, which Republicans cannot pass on their own.

Speaker Mike Johnson blasted Democrats for attempting to hold FISA hostage over Pulte, saying they were “playing political games.” Asked about Pulte’s qualifications, Johnson said Trump has every right to make interim appointments.

Democrats have widely objected to Pulte taking over DNI, which oversees the nation’s 18 intelligence agencies. They have pointed to his lack of experience on intelligence and military issues and his history of investigations targeting the president’s perceived enemies as director of the Federal Housing Finance Agency.

Secretary of State Marco Rubio, who previously served as the top Republican on the Intelligence Committee, acknowledged to House lawmakers on Wednesday that he’d never heard Pulte’s name in his years serving on the panel.

Thune also appeared to acknowledge wider skepticism of the appointment: “We don’t need a weaponized DNI,” he told reporters Tuesday. If the White House were to try to install Pulte in the role permanently, he added, he would have “a lengthy road ahead of him” to win confirmation.

Thune later deferred questions on Pulte to Cotton. “I have no observations on the matter,” Cotton then told reporters.

As acting DNI, Pulte could remain in the post for months without needing Senate confirmation, though people familiar with the situation told Bloomberg that he is intended to be a placeholder in the role until a full-time nominee is chosen. Trump said he would continue to serve as FHFA director while in the spy chief role.

Common shares of Fannie Mae and Freddie Mac are deepening Tuesday losses spurred by questions surrounding Pulte’s appointment. Pulte’s potential dual role is triggering concerns that it will delay long-standing plans to start selling the government’s stake in the two mortgage-finance giants.

Fannie shed as much as 9.5% on Wednesday, the most intraday since mid-May, while Freddie fell as much as 5.5% on Wednesday. Both have tumbled around 40% this year.

Credit-bureau shares were also under pressure on Wednesday, with FICO and TransUnion down around 7%. Pulte has been advocating for policies impacting that industry.

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(With assistance from Roxana Tiron, Erik Wasson, Eric Martin and Felice Maranz.)

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