In response to a speech Thursday by Federal Housing Finance Agency Director Mel Watt, U.S. Senator Bob Corker, a member of the Senate Banking Committee, said concerns about capital at government-sponsored enterprises Fannie Mae and Freddie Mac are not reason to return to the failed housing finance model that existed before the GSEs went under government conservatorship.
“While I appreciate Director Watt weighing in on these important issues, I am concerned about the direction of some of his comments,” said Senator Corker. “I agree Congress has waited far too long to solve the last remaining issue of the financial crisis, and that the status quo remains unsustainable. Absent congressional action, the focus should be on continuing to de-risk the GSEs without taking steps that put us back on a path toward the failed model of private gains and public losses that existed prior to conservatorship. Such steps would be counterproductive and do little to protect American taxpayers and enhance market liquidity.”
The president’s recently released fiscal year 2017 budget request reiterates the administration’s support for bipartisan housing finance legislation passed by the Senate Banking Committee in the last congressional session. The bill, the Housing Finance Reform and Taxpayer Protection Act of 2014 (S.1217), passed the committee in May 2014 by a vote of 13 to 9 and was first introduced by Senator Corker and Senator Mark Warner (D-Va.) in June 2013.
The president’s budget also recognizes the Corker-Warner Jumpstart provision that “limits the ability to return to the dysfunctional system in effect prior to conservatorship, and reinforces the need to enact comprehensive reform.” Senators Corker and Warner successfully included the Jumpstart provision as part of the 2016 Omnibus legislation, which passed Congress in December 2016.