House Panel OKs 6 Bills to Scale Back GSEs

July 13, 2011

A House subcommittee approved a group of six Republican-backed bills on Tuesday that are designed to shrink Fannie Mae and Freddie Mac’s role in the housing market.

That brings the total to 14 bills so far that the House Financial Subcommittee has approved, all bills that aim to scale back the government-sponsored enterprises (GSEs) and limit the government’s support of them. Lawmakers have been debating in recent months the fate of the GSEs, which were placed in government conservatorship in 2008 and has cost taxpayers, so far, about $138 billion.

Republicans mostly seek a mortgage system with less government backing. Among the six bills that will move forward Tuesday to the full committee, for example, were bills that called for barring the government from lowering the 10 percent annual dividend paid by the GSEs, capping the amount of taxpayer aid Fannie and Freddie can receive, making the institutions subject to the Freedom Information Act, and ending an affordable housing trust.

Another bill, introduced by Rep. Robert Hurt (R-Va.) would require the GSEs regulator to evaluate what kind of non-critical assets — such as mortgage data — that could be sold or placed into the public domain. Hurt said his bill would help "put an end to their near-limitless bailouts in order to protect American taxpayers at a time when they need it most."

However, Rep. Maxine Waters (D-Calif.) says the Republican bills "barely pick around the edges" of an overhaul of the mortgage market.

Some lawmakers have also criticized the Republican’s approach of introducing several bills to chip away at Fannie and Freddie, instead of a larger sweeping legislation. Rep. John Campbell (R-Calif.) says instead "we should have a thorough discussion and debate about what will replace Fannie and Freddie in the future."

Source: “House Panel Approves Fannie, Freddie Bills,”Dow Jones Newswires (July 12, 2011)

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