March 02, 2010

On February 24, Treasury Secretary Timothy Geithner told the House Budget Committee that the Administration will not release a proposal this year on restructuring the housing Government-Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac.  Geithner, who was testifying on the Administration’s FY 2011 Budget, said the Administration will lay out a set of broad objectives and principles this year, as well as some broad questions, and will invite public comment. 

The Administration will use the feedback they receive to help produce a set of legislative proposals to present to the Congress next year.  Geithner added that the Administration wants the government to play a less risky but more constructive role in supporting housing markets. 

In the House Financial Services Committee hearing the same day, Federal Reserve Board Chairman Ben Bernanke said the Federal Reserve would be very cautious about supporting a return to the existing structure of the GSEs.  Committee Chairman Barney Frank (D-MA) stated in January that his Committee “will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance.”  Frank has scheduled a hearing on the future of housing finance for March 23 and has invited both Geithner and HUD Secretary Shaun Donovan to testify.

More information from the hearings can be found on the House Budget Committee website and the House Financial Services Committee website.