[Congressional Record (Bound Edition), Volume 146 (2000), Part 12]
[Extensions of Remarks]
[Page 16943]
[From the U.S. Government Publishing Office, www.gpo.gov]



             THE HOUSING FINANCE REGULATORY IMPROVEMENT ACT

                                 ______
                                 

                             HON. PAUL RYAN

                              of wisconsin

                    in the house of representatives

                        Thursday, July 27, 2000

  Mr. RYAN of Wisconsin. Mr. Speaker, H.R. 3703, the Housing Finance 
Regulatory Improvement Act, if enacted, would enhance the regulatory 
structure of the housing GSEs--Fannie Mae, Freddie Mac, and the Federal 
Home Loan Banks (FHLBanks).
  While I do not agree with every proposal under this bill, I support 
advancing a constructive dialogue between Congress, the housing GSE's, 
their regulators and all industries involved. Continued work is needed 
to guarantee GSE mission compliance to forestall unfair competition 
into non-mission related products, as well as to ensure GSE safety and 
soundness to limit taxpayer liability.
  Currently, the housing GSEs are under good management and are in 
sound operating condition. That is why it is important to examine the 
systemic risk that these entities may pose to our financial system at 
the present time.
  Overall, I believe that the duties of the housing GSE's are somewhat 
divergent. On one hand, they have a mission to homebuyers to maintain 
liquidity in the housing markets and to stabilize mortgage rates. On 
the other hand, they are publicly traded companies that must return a 
profit to their shareholders. The means for a high shareholder return 
is manipulation of the GSE's implicit government subsidy, and there is 
a fine line between how much of the subsidy's benefits should be 
returned to homeowners and how much should be passed on to 
shareholders.
  Regardless, the GSEs have played an important role in bringing 
together homebuyers, lenders and capital from across the country and 
reducing mortgage rates. Again, while I do not support all provisions 
of H.R. 3703, I believe it is a step in the right direction. 
Introduction of this legislation has been a catalyst for serious 
discussion over the housing GSE's mission and the implications of 
financial failure. In cosponsoring this bill, I want to advance a 
dialogue to make certain that taxpayers and the private sector are 
protected from excessive risk and unfair competition.

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