Thanks for the head's up.
This is making less sense now.
After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration’s proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall.
‘’The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,’’ Mr. Oxley said at the hearing. ‘’We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,’’ the independent agency that now regulates the companies.
‘’These irregularities, which have been going on for several years, should have been detected earlier by the regulator,’’ he added.
The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development, was created by Congress in 1992 after the bailout of the savings and loan industry and concerns about regulation of Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.
Fannie Mae and Freddie Mac already had a federal regulator assigned to watch them. This regulator was a part of HUD.
Bush wanted to create a new regulatory agency over at Treasury.
Of course, there's no guarantee that this new regulator would have done any better job guarding Fannie and Freddie than the existing one, however.
So, Bush would rather create another new federal bureaucracy than fix the one already charged with oversight of Fannie and Freddie.
It's a mystery to me how the creation of a new federal regulator to do the exact same job as the existing one would've fixed the problem.
Here's what the OFHEO's web site says about their mission. (See: Supervision and Regulation)
The Federal Housing Enterprises Safety and Soundness Act of 1992 gives OFHEO a broad range of supervisory tools that the agency may employ not only to address Enterprise problems in a remedial fashion but also to take actions to prevent such problems from developing. The agency’s use of those authorities helps mitigate systemic risk by reducing the risk of failure of Fannie Mae and Freddie Mac.
After reading the article linked above, I'm wondering if he simply wanted to remove the burden and responsibility of oversight from his bailiwick. In 2003 President Bush had an immense amount on his plate already.
I'm just guessing here, though.
Not sure, but certainly the rules about low income home loans should’ve been revoked.
Did you see Ann Coulter’s latest column about this mess?
I lay this 90% or more at the feet of the Democrats.