WASHINGTON – Sen. Mel Martinez (R-Fla.) has joined with Sen. Tom Carper (D-Del.) to call for the creation of a new, world-class regulator to oversee Government Sponsored Enterprises (GSE), including Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
Sens. Martinez and Carper have offered their GSE reform package, which is identical to bipartisan legislation that passed the House last year, as an amendment to the Foreclosure Prevention Act of 2008 (H.R. 3221), the larger housing relief package under consideration in the Senate this week and next.
“One of the surest ways we can ensure investor confidence in GSEs like Fannie Mae and Freddie Mac is to implement meaningful oversight. The combined obligations of the GSEs exceed six trillion dollars and proper oversight is overdue,” said Sen. Martinez, a member of the Senate Banking Committee. “Congress must act to protect taxpayers and focus the GSEs back on their mission of facilitating affordable housing. The reforms we propose take bold steps toward strengthening the regulation and supervision of the GSEs.”
“As we work to pass legislation that helps the distressed housing market, Fannie Mae and Freddie Mac must remain the strong backbone of a mortgage market reeling from the subprime crisis,” Sen. Carper said. “We need to do everything we can to maintain confidence in the GSEs and their securities. Our bipartisan amendment does just that by creating a GSE regulator position that has more authority, independence and stature to calm the housing markets.”
The amendment will overhaul the regulatory oversight of the GSEs, and create a new, independent regulator with broad powers analogous to current banking regulators. The regulator’s primary responsibility will be to ensure the safety and soundness of the institutions. In addition, the bill creates an off-budget, non-taxpayer-financed affordable housing fund.
The amendment was first introduced by Reps. Barney Frank (D-Mass.), Richard Baker (R-La.), Mel Watt (D-N.C.) and Gary Miller (R-Calif.). The House passed the measure with a bipartisan majority of 313 to 104 last year.