Happy New Year!
- January 6, 2015
Happy New Year!
It’s a new year, and one filled with promise and potential! The 114th Congress will be sworn-in today, and, as we know, the big change is that it is a Republican-led Congress. What this means for Fannie Mae and Freddie Mac investors remains to be seen, but we do know one thing: the ill-conceived legislation that purported to initiate reforms yet did nothing to uphold and protect shareholder rights did not get the support it needed in the last Congress. Therefore there is hope for proper GSE reform.
The incoming Chairman of the Senate Banking Committee is Richard Shelby (R-AL). We’ve seen in the past that he’s open to hearing our arguments. Chairman Shelby’s Democratic counterpart will be influential as well. Ohio’s Sen. Sherrod Brown is a progressive champion. We saw him oppose Corker-Warner legislation because it didn’t “address too-big-to-fail concerns or provide assistance for affordable housing.” But he has also said that it may not be necessary to eliminate Fannie and Freddie and that “simpler changes” to them could be effective.
As the new Congress convenes, President Obama is hitting the road to prime the country for the policy announcements he’ll make in his upcoming State of the Union address. We’re already seeing news reports that GSE reform could feature prominently in at least one of his speeches. An item in the Capitol Hill publication The Hill noted this:
“[Later this week, President Obama will] head to Phoenix, where he’ll emphasize that the housing industry is showing signs of improving. Lawmakers have yet to pass a comprehensive housing reform package, despite bipartisan efforts in the Senate.
“Taxpayer-backed mortgage giants Fannie Mae and Freddie Mac repaid their bailouts following the 2008 economic collapse, but Obama and most lawmakers have argued that their government conservatorship cannot be permanent. Several Congressional proposals on both sides of the aisle have called for their demise, replacing it with a new government-sponsored entity.”
Our timing for the Investors Unite Capitol Hill Summit is fortuitous in that we’ll be meeting with influential lawmakers to discuss the importance of upholding the rule of law and protecting shareholder rights ahead of the State of the Union. No doubt our messages will be fresh in legislators’ minds as they listen to the direction the agenda the White House wants to set. We’ll be cautiously optimistic and hope that the Administration and Congress chart a course for Fannie and Freddie that achieves all of our goals.