Bill Seeks New Powers Over Fannie,Freddie

WASHINGTON - (04/06/05) -- Republican House leaders introducedlegislation Tuesday that would set a new regulatory scheme overFannie Mae and Freddie Mac and give the new regulator powers to setthe portfolio size of the two secondary mortgage market giants. Thebill, sponsored by House Financial Services Chairman Michael Oxleyand Rep. Richard Baker, would give the new regulator the authorityto order the two companies to adjust the size of their portfoliosbut would not set specific limits on their portfolios. Baker, along-time critic of the two companies, said he was not swayed byrecommendations by Federal Reserve Chairman Alan Greenspan andTreasury Secretary John Snow to limit Fannie's and Freddie'smortgage holdings to $200 billion each and to limit their purchasesof mortgage-backed securities, a key investment vehicle for creditunions. The bill would also set new capital standards for Fannieand Freddie and allow the regulator to determine new products andservices the two companies could offer. It would also include aseparate regulator for the 12 Federal Home Loan Banks under thesame roof as the new regulator for Fannie and Freddie.