Senate Banking Chair Urges Watt and Treasury to End GSE Conservatorships

By Paul Muolo

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The current chairman of the Senate Banking Committee Wednesday morning urged GSE regulator Mel Watt to “engage” the U.S. Treasury in a plan to end the conservatorships of Fannie Mae and Freddie Mac if Congress cannot agree on a solution to the two government-owned mortgage giants.

Chairman Sen. Timothy Johnson, D-SD, made his suggestion as part of his opening remarks as Federal Housing Finance Agency Director Watt prepared to give the committee an update on regulatory and supervisory matters affecting Fannie, Freddie and the Federal Home Loan Bank system.

The two GSEs have been in conservatorship for six-plus years now, with no legislative solution to their future in sight.

Sen. Johnson, however, will remain as committee chairman for just two more months. Not only is he retiring, but the Democrats lost control of the Senate in the November election.

In his prepared testimony, Watt said little that is new, and offered no hints on where the agency is headed on guaranty fees, FHLB membership and other key topics.

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