Rep. Blackburn Asks Colleagues to Support Her Bill on Fannie & Freddie Reserve
- April 20, 2015
Congresswoman Marsha Blackburn’s office sent a letter to her colleagues on Capitol Hill requesting that they join her in sponsoring The Enterprise Secondary Reserve Taxpayer Protection and Government Accountability Act, also known as H.R. 1673. The letter is called a Dear Colleague, in the parlance of federal lawmakers, and it explains the goal of legislation, some background information on why it’s being introduced, and why the outcome of getting the bill signed into law would be significant.
From the letter:
“If any losses at Fannie Mae or Freddie Mac were to occur in the future, there is a strong likelihood both organizations would be required to draw on the federal Treasury to meet their financial obligations. Meanwhile, the Treasury spends the money now that they collect each year from the enterprises.
“The Enterprise Secondary Reserve Taxpayer Protection and Government Accountability Act of 2015 will create a straightforward reserve fund to hold enough of the profits of Fannie Mae and Freddie Mac to protect the American taxpayer in the event of a housing downtown. This fund cannot be used to pay dividends, repurchase securities, or make any distributions to shareholders as long as [the enterprises] remain in conservatorship. It will also not prevent any future reforms to Fannie Mae and Freddie Mac that may be considered this Congress. The reserve fund would strictly act as an insurance policy against having to call on the American taxpayers to bail out Fannie Mae and Freddie Mac once again.”
Restoring shareholder rights and respecting the rule of law are integral to the strength of the nation’s housing market. Rep. Blackburn’s bill is a smart legislative solution to stem the damage from the U.S. Treasury bleeding Fannie and Freddie dry. Housing finance reform and determining the eventual path for Fannie Mae and Freddie Mac remain important issues that Congress should tackle, but while lawmakers are wrangling over that, we hope to see progress made in restoring private capital’s confidence in the GSEs.
Meanwhile, Investors Unite Executive Director Tim Pagliara spent a couple of days in Washington following up on the great meetings our members had in January with influential Members of Congress. While Tim’s meetings were productive, we encourage you, IU members, to continue your respectful correspondence with you representatives’ offices. Visit the Investors Unite “Take Action” page to send a letter to your representative supporting Representative Blackburn’s bill. Additionally, you can go to this link to vote for the legislation.
If you do receive a response to your letter, let us know and we may post it on the blog!