Senate Banking Committee Approves GSE Reform Bill

April 2, 2004

The Senate Banking Committee yesterday completed the marked up of  S.1508, the "Federal Housing Enterprise Regulatory Reform Act of 2004." The committee approved the bill by a 12-9 vote, following party lines with the exception of Sen. Zell Miller, D-Ga., who crossed over to vote with the committee's 11 Republicans.

The version of the bill passed by the Committee was introduced earlier this week by committee chairman Richard Shelby, R-Ala. It would establish a new regulator for Fannie Mae and Freddie Mac, known as the Federal Housing Enterprise Supervisory Agency. This regulator, an independent agency to be funded independently of the appropriations process, would largely replace the Office of Federal Housing Enterprise Oversight except for the GSEs’ fair housing responsibilities, which would remain under HUD.

The bill would also give the regulator authority to amend risk-based capital requirements, and somewhat limited authority to increase minimum capital requirements.