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GSE Reform Bills Moving Slowly in Congress
Legislation to provide regulatory reform for housing GSEs Fannie Mae, Freddie Mac and the Federal Home Loan Banks that has been passed by the House Financial Services Committee, H.R. 1461, appeared briefly to be headed for a full House vote last week before rumors of floor consideration were scuttled by House Majority Leader Tom Delay (R-Texas), who cited ongoing negotiations with conservative Republicans who are opposed to the bill’s creation of a new affordable housing fund.
Two weeks ago, Financial Services Committee Chairman Michael Oxley (R-Ohio) and Subcommittee Chairman Richard Baker (R-La.), the sponsor of the legislation, announced that they had drafted new language to tie the affordable housing fund to Hurricane Katrina relief efforts by giving priority status to devastated areas during the fund’s first two years.
Aimed at ensuring that the GSEs fulfill their mission of providing support for affordable housing, the fund would be phased in at 3.5% of their after-tax profits for the first two years and 5% of their profits in the following years, with a sunset after five years.
Negotiations over the fund appeared to reach a standstill last week, leaving any future consideration of the bill in the hands of the House Republican leadership.
NAHB has remained in constant communication with the Financial Services Committee to ensure that any compromise does not have a negative impact on the ability of home builders to participate in the new fund. The association has received assurances from senior-level committee staff that its remaining concerns over the legislative language have been addressed, and if the measure does move forward, NAHB is ready to support its balanced approach and fight off any attempts to weaken it on the House floor.
Since S. 190 passed the Senate Banking Committee on a party-line vote, the status of GSE reform legislation in the Senate has remained unchanged.
NAHB has opposed the Senate committee’s bill for its over-reaching and potentially devastating effects on the nation’s mortgage markets.
No efforts have been made to negotiate a consensus bill since S. 190 emerged from the committee, and with a wide gulf separating its supporters and opponents, its future remains unclear.
Committee Chairman Richard Shelby (R-Ala.) has repeatedly said that he would rather have no bill than a bad bill.
NAHB is continuing to urge all members of the Senate to pursue a compromise that would create a “world-class” regulator for the GSEs, but protect the critical role that these institutions play in the housing market.
Shelby continues to oppose the creation of an affordable housing fund, whether or not it is tied to Katrina recovery efforts.
To read the legislation, click here, and enter the bill number in the box at the upper left.
For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.
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