Shelby to Continue to Push for GSE Regulatory Reform This Year, Hopeful for Passage

WASHINGTON – Senate Banking Committee Chairman Richard Shelby (R-Ala.) released the 2006 tentative agenda for the Committee on Jan. 31, and the tentative agenda states that the Committee intends to continue its efforts to seek a consensus to move a strong GSE regulatory reform bill through the Senate. According to the National Journal, Shelby says he has a good chance of passing legislation this year to reform the oversight of housing Government Sponsored Enterprises Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Last July, the Senate Banking panel approved a measure that would create an independent regulator for the GSE. Democrats though have thwarted Shelby’s efforts to move the legislation to the full Senate floor because of their opposition to a provision in the bill that would allow the regulator to reduce Fannie’s and Freddie’s mortgage portfolios if they posed a “systemic risk” to the economy. The House version of the bill which passed last year, would allow the regulator to reduce the housing GSEs’ mortgage portfolios if they posed a safety and soundness risk. The measure would also create a new affordable-housing fund that is not included in the Senate bill.