Over the past decade, Rep. Richard H. Baker has been ignored, dismissed and, once, threatened with a lawsuit by representatives of Fannie Mae, the District-based mortgage-lending giant that his congressional committee helps oversee.
So the Louisiana Republican was shocked this year when Fannie Mae's interim chief executive, Daniel H. Mudd, handed him his cell phone number and invited him to call anytime. Baker did so a few days later and Mudd telephoned back almost immediately even though he was traveling overseas.
"In the past I had always been greeted with a dismissive approach, told that the CEO was a very busy person and then had to wait a long time for anyone to call back, often not the CEO," Baker said. "Now the company is very responsive. I am entering territory that I've never been before."
Fannie Mae, the biggest U.S. mortgage finance company, has been compelled by an accounting scandal to take a different approach as members of Congress debate legislation to limit the size and scope of its business. Once considered a fearsome force on Capitol Hill that repeatedly shot down such proposals, the federally chartered company -- and its smaller cousin in the home-finance business, Freddie Mac -- has accepted its weakened status and is trying to quietly temper and shape the legislation rather than kill it outright.
In place of a strategy that lawmakers regarded as bullying, Fannie Mae now emphasizes its eagerness to listen and to make its executives accessible. Its army of lobbyists has been reduced by a third and instructed not to swarm the Capitol as it once did. The company no longer targets lawmakers with acid-toned television commercials, instead working more closely with the housing industry to accomplish its goals.
"Their behavior has undergone a sea change," said Sen. Chuck Hagel (R-Neb.). "They had this town wired like no industry in America and everybody was scared to death to take them on. But now I sense more humility on their part."
"They were 800-pound gorillas," agreed Rep. Paul E. Kanjorski (D-Pa.). Today, he said, "They are much more interested in finding consensus."
In the past two years, Fannie Mae and Freddie Mac were forced to admit and then remedy huge financial irregularities and, as a result, replace their top managers. As a way to bolster their stock prices and their standing in the marketplace, the companies have reversed earlier objections and now enthusiastically support creation of a new federal regulator with enough authority to stop such problems from recurring.
Fannie Mae and Freddie Mac are still lobbying, of course, and their friends in the housing industry have stepped up their efforts to compensate for the companies' retrenchment. The National Association of Home Builders, for example, has told lawmakers that it may fight to defeat the bill if Fannie Mae and Freddie Mac are restricted too much.
But largely because of Fannie Mae and Freddie Mac's cooperation, lawmakers don't expect the legislation to fail. For the first time in memory, the companies are only quibbling over legislation that would replace their weak regulator with a vigorous alternative -- debating not whether they will be more tightly controlled, but by how much. The focus of debate now is whether Congress will limit the size of the companies or ask the new regulator to do so.
Drafting of the bill is scheduled to begin this week in the House Financial Services Committee.
"It's important for us to play a cooperative, constructive role; this is the year to get legislation passed," said Timothy J. McBride, Freddie Mac's chief lobbyist. "Our enterprise has been through a difficult period. This is hardly the time for arrogance. Our role is not to threaten, not to bully, not be a legislative bulldozer but to convince policymakers we're serious about our task."
