U.S. Rep. French Hill (R-AR) recently joined nine of his Republican colleagues on the U.S. House Financial Services Committee to urge increased oversight of Fannie Mae and Freddie Mac activities by the Federal Housing Finance Agency (FHFA).
“America’s housing finance system continues to put taxpayers at risk,” wrote Rep. Hill and the lawmakers in a July 7 letter sent to FHFA Director Sandra Thompson. “The Enterprises [Fannie Mae and Freddie Mac] have a history of venturing into new activities and product offerings that go well beyond their congressionally approved roles in the secondary market.”
The FHFA must do more to ensure there is appropriate transparency regarding any new products or activities that the Enterprises undertake and that these activities do not displace private firms or crowd out private capital, according to their letter.
Specifically, Rep. Hill and his colleagues urged Thompson, newly confirmed to serve as FHFA’s director, to make one of her first actions to finalize “the long overdue rulemaking” on Prior Approval of Enterprise Products, which was proposed in October 2020 to ensure adequate oversight and transparency around new products and activities that the Enterprises bring into the market.
The rulemaking, they wrote, is a statutory requirement under Section 1123 of the Housing and Economic Recovery Act of 2008 that has yet to be met over a decade later.
“As the regulator and conservator of the Enterprises, the FHFA must conduct proper oversight of their operations and ensure that all their activities comply with their congressional charter,” wrote Rep. Hill and the lawmakers. “Pilot programs should not be operating as back doors for the Enterprises to expand into areas already being served by the private sector or to push a housing policy agenda that introduces unacceptable risk to taxpayers.”
Among the members who joined Rep. Hill in signing the letter were U.S. Reps. Bill Huizenga (R-MI) and Andy Barr (R-KY).