Thursday, January 27, 2011

House Bill Would Apply FOIA to Government-Sponsored Enterprises

House Bill Would Apply FOIA to Government-Sponsored Enterprises
A bill introduced by Rep. Jason Chaffetz (R-UT) would apply the Freedom of Information Act to Fannie Mae and Freddie Mac during periods when these GSEs are in conservatorship or receivership, as they are now. The measure (HR 463) is designed to achieve a level of transparency and accountability in federal agencies. The legislation is co-sponsored by House Financial Services Committee Chair Spencer Bachus (R-ALA) and the committee’s Deputy Chair Jeb Hensarling (R-TX), who introduced major GSE reform legislation in the 111th Congress.

Another co-sponsor of the bill, House Oversight Committee Chair Darrell Issa said that Fannie Mae and Freddie Mac are being run by the federal government to achieve objectives set by the federal government. As long as this continues, he emphasized, it is common sense that they should be subject to FOIA requests.

The Hensarling bill, HR 4889, would have set a deadline for the Director of the Federal Housing Finance Agency to terminate the conservatorship of either Fannie Mae or Freddie Mac if the Director determines that it is financially viable. It would also instruct the Director to establish minimum levels of capital for the enterprises and deem failure of an enterprise to maintain revised minimum capital levels to constitute an unsafe and unsound condition. Moreover, the bill would prohibit the enterprises from purchasing and securitizing mortgages that exceed the median area price for the affected property.

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