Summary

Government Sponsored Enterprises (GSE)s such as Fannie Mae and Freddie Mac need more oversight.

Background

Concerns have been raised the the GSEs have become so big that they could be a threat to the financial markets if they had trouble. Recent accounting problems at Freddie have increased this concern.

Details

The current OFHEO supports legislation that creates an independant, Bank Regulator-Like Agency with a mission to support both housing and Safety and Soundness of the financial markets. This entity would have power to regulate the Capital Requirements and Portfolio of the GSEs./1/

Political Context

Previous GSE reform legislation was considered but did not pass the 109th congress. Rep. Barney Frank has said he will propose legislation in the 110th./2/

Additional Links

/1/ OFHEO "GSE Reform, a priority for 2007"
/2/ Gordon, Marcy "Fannie Mae, Freddie Mac still have huge financial problems, regulator says" Associated Press 1/18/07