Rep. Richard Baker has assembled a panel of consumer and taxpayer advocates - including Ralph Nader - for a House Banking subcommittee hearing this morning on his bill to tighten regulation of Fannie Mae and Freddie Mac.

An aide said the Louisiana Republican wants to hear from consumers and taxpayers about how his bill will affect them. Fannie and Freddie have tried to portray the bill as anti-consumer.

The Baker bill would eliminate the government-sponsored enterprises' $2.25 billion lines of credit with the Treasury and establish a single regulator with final say on new programs they propose.

Fannie Mae has argued that the public debate over the bill was hurting consumers by driving up mortgage rates.

Mr. Nader, arguably the most famous consumer advocate in America, will sit with three other witnesses on the consumer advocate panel: John Taylor, president and chief executive officer of the National Community Reinvestment Coalition; Peter Skillern, director of the Community Reinvestment Association of North Carolina; and William Cunningham from the board of pensions of the Evangelical Lutheran Church in America.

Representing taxpayer watchdog groups on a second panel will be Tom Schatz, president of Citizens Against Government Waste; Peter Sepp of the National Taxpayers Union; and Fred Smith, president of the Competitive Enterprise Institute.

Mr. Taylor said he wants Fannie and Freddie to do more lending to low- and moderate-income people "and people of color."

"We would like to see the GSE's increase lending to traditionally underserved people, avoid any participation in predatory lending activities, and do a careful review of the impact of subprime lending on underserved communities," Mr. Taylor said.

Mr. Skillern said that predatory lending is an increasingly important issue for Fannie and Freddie, because both institutions are entering the subprime market. "We are concerned that without adequate consumer protections in place, Fannie and Freddie will do more harm than good," he said.

Mr. Skillern said he plans to "lay out an example of a subprime loan from one of the GSEs' partner agencies to raise the question of whether this type of lending is part of their mission."

Mr. Smith said he is concerned that Fannie and Freddie "straddle the fence" between the public and the private sectors. "They are acting as if they are private entities, but they have implicit guarantees," he said.

He said the implied government guarantee of Fannie and Freddie means they are less likely to invest wisely, because they do not have to bear the cost if they guess wrong. "Profit-side capitalism and loss-side socialism is a bad idea," he said.

Mr. Smith said he supports tighter regulation of Fannie and Freddie's new activities. The two enterprises are "already doing second mortgages, which can be used for anything," he said. "By getting into that and home equity, they get into functions that have nothing to do with homeownership. Someone should check what they get into," because they "can out-compete everyone."

He also took Fannie's lobbying efforts to task. "Buying full-page ads in The New York Times is a hell of a way of serving communities better, and spending millions of dollars saying, 'We're the Mister Rogers of the housing markets' is a hell of a way of improving consumer welfare or housing welfare."

Mr. Nader, Mr. Cunningham, Mr. Schatz, and Mr. Sepp did not return calls for comment.

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