Frustrations over the Office of Federal Housing Enterprise Oversight's budget resurfaced last week in the regulator's annual report and in hearings before Congress.
The report, released Thursday, implies that the office needs more money for research to improve its regulation of Fannie Mae and Freddie Mac.
In a letter enclosed in the report, Armando Falcon, the Oversight Office's director, provides the text of a model amendment that his agency supports. The amendment - to the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 - would remove the oversight agency from the congressional appropriations process and thus eliminate its funding problems, its proponents say.
The letter is addressed to Sen. Phil Gramm, R-Tex., and Jim Leach, R-Iowa.
The Office of Federal Housing Enterprise Oversight was created in 1992 to keep an eye on Fannie Mae and Freddie Mac in the wake of the savings and loan debacle. It attracted media attention in May when a House appropriations subcommittee gave it $4 million less than it had asked for in its 2001 budget.
The subcommittee's decision was questioned by lawmakers concerned that lack of adequate funding, given the complexity of Fannie and Freddie's operations and their enormous growth in the 1990s, would hinder the office's supervision of the two government-sponsored enterprises.
The Oversight Office need look no further than to Ralph Nader for support. Testifying before a House Banking subcommittee Thursday, Mr. Nader said, "To cut the budget of an agency trying to cope with these mammoth financial institutions is an outrage - a slap at the taxpayers who, unfortunately, bear the ultimate risk."
Mr. Nader was testifying at a hearing on a bill sponsored by Rep. Richard Baker, R-La., that would repeal Fannie and Freddie's $2.25 billion lines of credit with the Treasury and create a consolidated regulator to watch over them.