Posted on Monday, February 14, 2011
WASHINGTON (MNI) - In a preview of the kind of political back-and-forth that can be expected as the reform of the highly politicized Fannie Mae and Freddie Mac begins, former House Financial Services Committee Chairman, now ranking member, Barney Frank took aim the house majority during a hearing Wednesday.
"I have heard criticism of the Administration for missing its deadline," Frank said, referring to the Administration's deadline to deliver a proposal on housing finance reform by the end of January.
"I had not previously thought that the majority was waiting around for the president to get to them what to do," Frank said.
Frank rhetorically asked why the Republican majority was not voting on H.R. 4889, a bill that was introduced by Republican Rep. Jeb Hensarling of Texas in March 2010.
The bill proposes establishing a certain term for the conservatorship of Fannie and Freddie and a plan to wind them down.
Hensarling who was also at the hearing fired back at Frank, saying, "I would wonder where the fascination was when he was committee chairman."
Hensarling said the bill has not been reintroduced since the new session of Congress has begun, but said it is being "refined" and that he intends to reintroduce the bill.
In a post-hearing interview with Bloomberg TV, Frank said the Republicans are not ready to shutdown Fannie Mae and Freddie Mac but said he thinks an agreement on how to restructure them should not take five years as some have suggested.
"I think by the end of the year we should have an agreement," he said.
Exploring some of the other housing finance reform issues that are at the heart of the debate, Frank said he thinks there should not be a reduction in conforming loan limits and that some sort of government guarantee would be beneficial for having a 30-year fixed rate mortgage.
"I think if conforming limits go down, it is a great element of geographic discrimination," Frank said.
The hearing's witness list included experts on housing policy from four different think tanks, but their testimony was less substantial considering White House spokesman Robert Gibbs said in briefing Wednesday that the Administration will release its proposals on how to reform the housing finance market Friday.
Rep Scott Garrett, the chairman of the Capital Markets subcommittee that was holding the hearing admitted as much, saying, "I know a lot of attention has been given to Treasury's proposal on what the future of U.S housing finance will look like."
By Ian McKendry, Market News International Washington Bureau