Groups respond to administration's proposal for GSE regulation.

MBA, FANNIE MAE, FM POLICY FOCUS, THE Office of Federal Housing Enterprise Oversight (OFHEO) and the National Black Caucus of State Legislators (NBCSL) have responded to the Bush administration's proposal for the regulation of the government-sponsored enterprises (GSEs).

MBA applauded

the testimony delivered by Treasury Secretary John Snow and Department of Housing and Urban Development (HUD) Secretary Mel Martinez on GSE regulation. In testimony before the House Financial Services Committee on GSE regulation in September, the administration emphasized the important role of the housing sector in the U.S. economy's recovery and its commitment to strong, effective and independently funded regulation of the GSEs. MBA Chairman John A. Courson stated MBA "has had a long-standing policy of supporting an independent, well-funded regulator for the GSEs, and we look forward to reviewing specific proposals of GSE regulation legislation."

In a statement, Fannie Mae Chairman and Chief Executive Officer Franklin D. Raines said Fannie Mae welcomes the administration's approach of assigning GSE financial regulation to a bureau of the U.S. Treasury Department. "We believe that having a strong, well-funded financial regulator is in the best interests of housing and the financial system, as well as Fannie Mae and our investors, shareholders and stakeholders," Raines stated. "We believe the administration's approach addresses an important policy issue while ensuring that no harm comes to housing or the contribution housing makes to a strong economy."

In response to the testimony by Snow and Martinez, Washington, D.C.-based FM Policy Focus Chairman J.C. Watts stated that his organization applauded the administration's proposal, saying it "represents a strong step forward for American taxpayers, fair competition, the safety and soundness of the American housing finance system and the interests of American homebuyers, particularly [those] of low and moderate income."

OFHEO Director Armando Falcon Jr. said the administration proposal "would provide important regulatory enhancements such as permanent funding outside of the appropriations process and enhanced safety and soundness authority, which I have been seeking for several years." However, Falcon cautioned, "if OFHEO is moved to Treasury, we must ensure that it remains an independent regulator, comparable to all other safety and soundness regulators."

In a statement issued the day before the administration's proposal was unveiled, the NBCSL stated, "On behalf of the National Black Caucus of State Legislators, in accordance with NBCSL's resolution voted and unanimously passed, we ask the United States Congress to leave Fannie Mae intact and not to change its mission, charter or status. ... Today, at a time when the millions of constituents we represent are in need of affordable housing, Fannie Mae and Freddie Mac are meeting a critical need. We believe that Congress must be careful not to restrict their ability to provide their core mission of affordability."