WASHINGTON — Rep. Jeb Hensarling is criticizing a provision in a House-approved immigration bill that would extend higher guarantee fees at the government-sponsored enterprises.
The GOP-supported bill would grant more visas to foreign students at American graduate schools. But to help pay for the legislation, it would also extend by an additional year an increase in loan guarantee fees charged by Fannie Mae and Freddie Mac. The increase of on average 10 basis points — which was mandated under last year's temporary payroll tax extension — is now set to expire in October 2021.
Hensarling, a Texas Republican who will become chairman of the House Financial Services Committee next year, said while he supports such fee increases they should not be used to fund unrelated programs. Despite his concerns, he still voted for the bill.
"Increasing guarantee fees is critically important to reforming the GSEs and bringing an end to their bailout by reducing their competitive advantages and dominance of our housing finance in the market," Hensarling, an outspoken critic of the GSEs, said in a statement. "While I strongly support guarantee fee increases to allow the private sector to compete with the GSES on a more level playing field, directing these fees to unrelated spending is bad policy. Inclusion of this provision made this a very difficult vote. Moving forward, I am committed to ensuring that any future guarantee fee increases are not misdirected."
The legislation — entitled the STEM Jobs Act — still faces an uphill battle to enactment. The Obama administration issued a statement of policy opposing the bill on Wednesday.