HUD Announces Review Of Fannie And Freddie Investments To Ensure Charter Compliance
June 14, 2006
WASHINGTON – In an effort to ensure Fannie Mae and Freddie Mac comply with their government charters and public purposes, Housing and Urban Development Secretary Alphonso Jackson today announced HUD's Office of Housing will soon begin a review of the debt and equity investments of these Government Sponsored Enterprises (GSEs).
The following is an excerpt from Jackson's remarks to a congressional caucus this morning:
"I look forward to working with Congress on establishing a strong new regulator, but until this legislation is passed, I intend to use authority granted me by the Federal Housing Enterprises Financial Safety and Soundness Act to increase the transparency of the GSE's.
"Financial transparency is in the best interests of all Americans. The lack of transparency as it relates to the GSEs' financial dealings is a regulatory concern.
"To that end, the Department will soon initiate a review of Fannie Mae and Freddie Mac investments and holdings, including certain equity and debt investments, with a focus on transactions classified on their financial statements as 'other assets/other liabilities.'
"HUD's primary concern is whether the GSEs' investment activities are consistent with their charter authorities and public purposes and whether each is using the profits it derives as a government-sponsored enterprise for the purposes intended.
"Increased regulatory awareness of investment activity is of particular concern where the transactions have no transparency on a GSE's financial statement, as is the case with transactions classified as 'other assets/other liabilities."
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