As proposed in the draft legislation, an independent regulator at the Treasury Department “should be well suited” to oversee the financial health of Fannie Mae and Freddie Mac, he added.
The new draft proposal “represents a tremendous advancement toward accomplishing essential reform of the housing GSEs,” Howard said, but there is still work to be done as the legislation moves forward.
A provision that would provide HUD with “over-arching” regulatory authority over all activities of Fannie Mae and Freddie Mac would, he said, “significantly expand HUD’s current oversight,” and could result in the agency becoming too involved in the minutiae of the GSEs’ day-to-day operations.
That, he warned, “could stifle the GSEs in their ability to create the kind of innovative products and programs that have helped dramatically expand homeownership in this country.”
The proposal should also require HUD and the Treasury “to stick to their own knitting,” Howard said.
The new Treasury office would have some say on mission-related issues, he explained, and overlapping or conflicting responsibilities in this area could hamper the efficient operation of the nation’s housing finance system. He said that a strict delineation of the regulatory roles of the new Cabinet agencies is “absolutely necessary.”
“We’re now significantly ahead of where we were when the debate over GSE oversight began” only a few weeks ago,” Howard said.
“NAHB looks forward to working with the leadership and other members of the House Financial Services Committee, the Bush Administration and our fellow key players in the housing industry to forge a consensus bill that truly sends the right signals to both Wall Street and Main Street,” he said.
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