concerned Fannie Mae and Freddie Mac will expand into businesses where they would compete unfairly with private-sector financial companies.
The trade group, which represents the country's largest banks, said that activities of the government-sponsored enterprises are going beyond what is allowed in their charters. In particular, the Roundtable said the secondary-market agencies are getting too involved in buying home equity and subprime loans and selling real estate. Another concern is that Fannie and Freddie will work directly with consumers, tying mortgage products to other financial services.
The Roundtable is a member of FM Watch, a coalition of Fannie Mae and Freddie Mac critics formed earlier this year.
The trade group's statement comes a day after FM Watch named top executives from some of the country's largest banks to its board of directors. Those appointed included Chase Manhattan Corp.'s president and chief executive officer, William B. Harrison Jr., and Wells Fargo & Co.'s president and chief executive, Richard M. Kovacevich.
Fannie Mac spokesman David Jeffers said the lenders' attacks are unfounded. He said the banking companies are trying to create a diversion from their concern that some agency activities lower costs and cut profit margins.
But a private sector representative said Fannie's growth goals exceed the mortgage market's growth rates. In order for Fannie to do that, it would either "take a significant chunk of business away from the mortgage industry or go elsewhere," he said.
-- Katharine Fraser