New Fannie Scandal Could BoostPrivatization Efforts

WASHINGTON - (09/30/04) -- Congressional credit union championPaul Kanjorski predicted the latest accounting scandal at FannieMae will lead to increased efforts to privatize Fannie and itssister government sponsored enterprise, Freddie Mac, if theRepublicans retain control of Congress next year. "If Republicanswin control of the House, the Senate and the White House againthere will be strong movement for privatization," the PennsylvaniaDemocrat told attendees to NAFCU's Congressional Caucus Wednesday."I hear Republican colleagues say all the time, 'let's privatize,'"But Kanjorski, a senior member of the House Financial ServicesCommittee that would act on any privatization bill, urged cautionin removing the government reigns from the two secondary mortgagemarket giants. If Fannie, one of the largest financial institutionsin the world, were to fully privatize, it would be in a position totakeover some of the largest financial institutions, includingbanking giant Citicorp. That, said Kanjorski, would pose seriousthreats to the financial system by removing any constraints on whatlines of business the company could enter and "we will have lostany hook to making sure it's being run transparently."