WASHINGTON - Consumer advocate Ralph Nader testified before a House subcommittee hearing Thursday in favor of many of the tenets of a bill intended to tighten regulation of Fannie Mae and Freddie Mac.

The bill, sponsored by Rep. Richard Baker, R-La., would consolidate regulation of Fannie Mae, Freddie Mac, and the Federal Home Loan banks under a single regulator. There are currently three.

Mr. Nader not only supported the bill wholeheartedly but also called for Congress to take it a step further.

Congress "needs to do more to examine the adequacy of the housing goals and the performance of the GSEs on affordable housing in low- and moderate-income and minority communities," he said.

Mr. Nader also offered several suggestions of his own. He proposed that the Department of Housing and Urban Development continue to analyze and update housing goals for the government-sponsored enterprises, which the bill does not provide for. Housing goals would encourage Fannie and Freddie to buy loans to low-income borrowers and minority group members. He also advocated requiring ongoing disclosure of data by the enterprises.

Mr. Nader did not hold back on the corporate front, taking several jabs at Fannie and Freddie. He attacked Fannie's argument that reform proponents are causing a "tax on homeownership" as "anemic." "I once said to Fannie's executives: 'I guess your high salaries are a tax on homeownership,' " he quipped.

Mr. Nader also took a shot at Fannie and Freddie's much vaunted lobbying presence in Washington. "Congress needs to look more to the protection of the taxypayers, and less to the hyperbole of the GSE lobbyists that form a standing army on Capitol Hill," he said.

Barry Zigas, the senior vice president and executive director of Fannie Mae's national housing impact division, said, "Our record speaks for itself regardless of where the criticism comes from. Our record shows substantial attention to the needs of low- and moderate-income borrowers. Our lending to minorities has increased substantially."

Mr. Zigas added, "Ralph's criticisms have been aired before: I didn't hear anything today that challenges the fundamental efficacy of the regulatory structure today."

The Baker bill would eliminate Fannie and Freddie's standby lines of credit with the Treasury, each for $2.25 billion, which are seen by many investors as implying the government would bail out the two companies if they ever defaulted.

The bill also calls for a Federal Deposit Insurance Corp. study of the impact a failure of one of the government-sponsored enterprises would have on banks' solvency, which, according to Mr. Nader, held an estimated $210 billion of the enterprises' debt in mid-1999.

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