Fannie and Freddie

I attended yesterdays Oversight and Government Reform Committee hearing hoping to ask the panel three essential questions: Who knew what and when, and what action did they take?  Today, Idaho’s mom and pop investors are losing their hard-earned savings in their retirement funds, while some corporate CEO’s have received golden parachutes.  Idahoans want to know if anyone is going to go to jail for causing this crisis. SEC Chairman Chris Cox indicated that is likely given the large number of prosecutions he has begun.  I hope he is correct.

I, along with 28 other members of the House Financial Services Committee, have sent a letter to the Committee's Chairman Barney Frank, urging him to invite former executives of Fannie Mae and Freddie Mac to testify at the scheduled hearing on October 21 on restructuring and reform of the financial system.

I've also requested hearings on alleged abuses by the Association of Community Organizations for Reform Now (ACORN), which receives significant funding from Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development and has made many headlines in recent weeks for alleged election fraud.

I don’t think either side is thrilled with the final housing compromise we passed today, although that’s not always a bad thing.  The good news is that the plan includes the three pillars of housing reform that I have been promoting for years – increased housing counseling, FHA reform, and an improved GSE regulator.  Taken together, these three portions of the bill promise to have a positive, stabilizing effect on the market without squandering taxpayer dollars.

As a member of the Financial Services Committee, I have requested that the administration’s proposals to prop up the Government Sponsored Entities (GSE), Fannie Mae and Freddie Mac receive hearings and full deliberation before a floor vote.

Ensuring a functioning mortgage market and sound economy are important obligations.  Protecting taxpayers from liability and huge tax hikes, however, are also essential responsibilities.  The administration’s desire to calm financial markets is appreciated, yet it is important that Congress also act calmly.