A House bill that would create a new independent regulator to oversee mortgage funding giants Fannie Mae and Freddie Mac is heading to the floor for a vote next week, Majority Whip Roy Blunt (R-Mo.) said yesterday.
House Financial Services Chairman Michael G. Oxley (R-Ohio), one of the bill's co-sponsors, plans to offer several changes, including additional restrictions on a proposed affordable housing fund to be financed by Fannie Mae and Freddie Mac. Oxley's amendment would prohibit groups from receiving money if they engaged in get-out-the vote efforts or other election activity in the past year, according to a draft of his amendment obtained by The Washington Post.
Two weeks ago, Oxley agreed to make the changes as part of a compromise with conservative lawmakers who feared that the money would go to groups that advocate against Republican policies. The compromise has since come under fire from nonprofit, civil rights and faith-based groups such as the U.S. Conference of Catholic Bishops and Independent Sector, which represents charities, foundations and corporate giving programs.
They plan to ask House leaders to let lawmakers vote on the proposed restriction separately from the rest of the bill.
Whether lawmakers get that chance depends on House leaders and the House Rules Committee, which will decide Tuesday whether any amendments will be considered on the floor and, if they are, what those amendments would be. Members have until noon that day to hand in possible amendments, said Jo Maney, spokeswoman for Rules Committee Chairman David Dreier (R-Calif.).
Rep. Scott Garrett (R-N.J.) said he plans to offer an amendment in the Rules Committee that would require Fannie Mae and Freddie Mac to reduce the size of their combined $1.5 trillion investment portfolios.
Garrett cited previous comments by Federal Reserve Chairman Alan Greenspan, who contends that the companies have grown so large they pose a risk to the financial system.
If the companies were to misjudge and not adequately protect the value of their assets from swings in interest rates, Garrett said, the result "would make the savings and loan scandal just pale by comparison."
The White House has also criticized the House bill for not doing enough to rein in Fannie Mae and Freddie Mac. It prefers a Senate bill that would force the companies to shrink by limiting the kinds of assets they could hold.
The House vote comes nearly a year after federal regulators ordered Fannie Mae to restate $10.8 billion in previously reported earnings because of accounting problems and nearly two years after Freddie Mac restated $5 billion in earnings. Both companies and their former managers face shareholder lawsuits and investigations by the Securities and Exchange Commission and federal prosecutors.