[Congressional Record (Bound Edition), Volume 163 (2017), Part 5]
[House]
[Pages 6070-6074]
[From the U.S. Government Publishing Office, www.gpo.gov]




              FANNIE AND FREDDIE OPEN RECORDS ACT OF 2017


                             General Leave

  Mr. ROSS. Mr. Speaker, I ask unanimous consent that all Members have 
5 legislative days within which to revise and extend their remarks and 
include extraneous material on H.R. 1694.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Florida?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to House Resolution 280 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 1694.
  The Chair appoints the gentleman from Georgia (Mr. Collins) to 
preside over the Committee of the Whole.

                              {time}  1419


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 1694) to require additional entities to be subject to the 
requirements of section 552 of title 5, United States Code (commonly 
referred to as the Freedom of Information Act), and for other purposes, 
with Mr. Collins of Georgia in the chair.
  The Clerk read the title of the bill.
  The CHAIR. Pursuant to the rule, the bill is considered read the 
first time.
  The gentleman from Florida (Mr. Ross) and the gentleman from Missouri 
(Mr. Clay) each will control 30 minutes.
  The Chair recognizes the gentleman from Florida.
  Mr. ROSS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I rise today in support of H.R. 1694, the Fannie and 
Freddie Open Records Act of 2017.
  Mr. Chairman, transparency is critical. It is critical to oversight 
and accountability of the Federal Government and how it spends taxpayer 
dollars. The American public has a right to know how their tax dollars 
are spent.
  The Freedom of Information Act, or FOIA, is a key tool for citizens 
to access information about their government. Fannie Mae and Freddie 
Mac are not subject to the requirements of FOIA, despite taxpayers' 
substantial investment into both entities and the government's implicit 
guaranteed backing of these entities.
  Taxpayers have spent $187 billion to bail out Fannie and Freddie, the 
most sweeping government intervention into private financial markets in 
decades. Taxpayers are on the hook for $400 billion in lost investments 
and $5 trillion in mortgage liabilities.
  At the same time, the American public is unable to seek 
accountability from these entities under FOIA. It is

[[Page 6071]]

far past time we apply FOIA to Fannie and Freddie. There is precedent 
for applying FOIA to non-traditional quasi-governmental entities. 
Congress subjected Amtrak to FOIA in recognition of sizeable taxpayer 
funding.
  To stabilize the housing market in the aftershock of the 2008 
financial crisis, the Federal Housing Finance Agency placed Fannie and 
Freddie into conservatorship to return them to financial viability and 
stockholder control. FHFA is a government entity subject to FOIA. Under 
the terms of its conservatorship over Fannie and Freddie, FHFA 
exercises the titles to their books and records, as well as the powers 
and privileges of Fannie and Freddie.
  Despite this government intervention and explicit guarantee, 
taxpayers, however, are unable to obtain any information from Fannie 
and Freddie.
  H.R. 1694, the Fannie and Freddie Open Records Act of 2017, sponsored 
by Oversight and Government Reform Chairman Jason Chaffetz, will allow 
the American public to submit FOIA requests to Fannie and Freddie as 
long as the entities remain under FHFA's conservatorship. H.R. 1694 
reflects FOIA's presumptions of openness, granting taxpayers 
information unless an exemption applies.
  This bill is a commonsense measure to allow the American public 
access to basic information regarding entities that they fund with 
their tax dollars.
  The American public should not be in the dark when it comes to what 
Fannie and Freddie are doing.
  Mr. Chairman, I urge support for the legislation, and I reserve the 
balance of my time.
  Mr. CLAY. Mr. Chair, I yield myself such time as I may consume.
  Mr. Chair, I rise in support of this bill, the Fannie and Freddie 
Open Records Act of 2017.
  I want to start by thanking the sponsor of this bill, Chairman 
Chaffetz, for working with the Democratic members of the Committee on 
Oversight and Government Reform to address concerns that we raised as 
well as concerns raised by the Federal Housing Finance Agency. The 
bipartisan cooperation that was demonstrated on this bill should be a 
model for this body.
  This bill would apply the Freedom of Information Act to Fannie Mae 
and Freddie Mac while they are in conservatorship or receivership. 
Fannie Mae and Freddie Mac are stockholder-owned, government-sponsored 
enterprises chartered by Congress to purchase mortgages and pool them 
into mortgage-backed securities to create liquidity in the mortgage 
market.
  Fannie Mae and Freddie Mac were brought into Federal conservatorship 
under the control of FHFA in September 2008. According to the CBO, 
during the financial crisis, Treasury purchased $187 billion of senior 
preferred stock from the two entities to ensure that they could 
continue to operate. Neither entity has drawn on Treasury support since 
2012, both have returned to profitability, and the dividends they 
generate are paid to the Treasury.
  There are some practical concerns with the underlying bill because it 
would apply FOIA to these private companies for the first time. The 
amendment Chairman Chaffetz will offer addresses some of those 
concerns, which I will discuss when we consider this amendment.
  I would like to discuss some concerns with language that was added in 
this bill at the Rules Committee to address the estimated cost of the 
bill.
  CBO estimates that this bill would increase the administrative costs 
of Fannie and Freddie by $310 million, with $10 million of that 
resulting in direct spending. This bill would address those costs by 
requiring commercial requesters to pay for processing FOIA requests 
made to Fannie and Freddie. This would be a significant change from the 
way FOIA typically works.
  It is unclear how Fannie and Freddie could reasonably estimate how 
many FOIA requests they would receive or to know how to distribute 
administrative costs equitably among commercial requesters.
  The bill would allow Fannie and Freddie to determine how much they 
would charge commercial requesters. Whatever cost estimation 
methodologies Fannie and Freddie choose to use, the methodologies will 
almost certainly be challenged, potentially leading to litigation, 
which would be handled by the Department of Justice.
  It is highly likely that banks would file FOIA requests to obtain 
information about the business practices and holdings of Fannie and 
Freddie. The costs charged to them for their requests would then be 
passed on to consumers.
  I believe this language was intended to be helpful, but it is one 
result of applying to private companies a statute designed to apply to 
government agencies. We should carefully analyze this provision and its 
likely consequences as this bill moves forward in the legislative 
process. There may be a better way to address this issue.
  I also hope that the chairman will continue to seek ways of expanding 
transparency in government, and that the committee's next step will be 
to require the disclosure of White House visitor logs.
  The White House recently reversed what had been the Obama 
administration's policy of disclosing the records of who comes and goes 
from the White House. The president of Judicial Watch, Tom Fitton, 
said:
  ``This new secrecy policy undermines the rule of law and suggests 
this White House doesn't want to be accountable to the American 
people.''
  I look forward to working with the chairman to address this very 
troubling reversal of a critical government transparency policy.
  Mr. Chairman, I reserve the balance of my time.
  Mr. ROSS. Mr. Chairman, I yield 2 minutes to the gentleman from 
Arkansas (Mr. Hill).
  Mr. HILL. Mr. Chair, I thank my friend from Florida for the 
opportunity to speak on this bill. And as a member of the House 
Financial Services Committee, I am grateful for the bipartisan 
leadership in the Oversight and Government Reform Committee in bringing 
H.R. 1694 to the floor, for it is high time that Fannie Mae and Freddie 
Mac be subject to the regimen of the Freedom of Information Act. This 
critical oversight tool is sorely past due for these government-
sponsored agencies.
  Over the past four decades, we have seen the waste and largess 
exhibited by Fannie Mae and Freddie Mac embedded in their everyday 
operations. And while they got their start during the height of the 
Depression and performed an able task of setting high standards for the 
liquidity for mortgage credit, they have long outlived their original 
charter.
  Oakley Hunter, the president and chairman of Fannie Mae back in the 
1970s, described Fannie Mae as the world's largest floating crap game. 
Nothing has changed.

                              {time}  1430

  In the early 1980s, we found Fannie Mae and Freddie Mac dominating, 
as they do today, 9 out of 10 mortgages in the United States, and yet 
they were highly unprofitable and highly suspect in their management. 
During that time, Senator William Proxmire led the charge in the United 
States Senate seeking answers about the enterprises' executive 
compensation.
  Flash-forward to the 1990s, we saw executive compensation at Fannie 
Mae run amok.
  During the 2000s, their imprudence and desire for growth paved the 
way for the U.S. housing crisis and global economic collapse.
  More recently, we have discovered that Fannie Mae is spending $171 
million in taxpayer funds on a new Taj Mahal office in Washington, 
D.C., to replace their already extraordinarily luxurious campus on 
Wisconsin Avenue, which one Washingtonian, Mr. Chairman, described as 
what Versailles would look like if Louis XIV had any money. According 
to the inspector general's report from last June, this 15-year cost of 
relocating Fannie Mae's headquarters and the construction of the new 
building now topped $770 million.
  The CHAIR. The time of the gentleman has expired.
  Mr. ROSS. Mr. Chair, I yield an additional 30 seconds to the 
gentleman from Arkansas.

[[Page 6072]]


  Mr. HILL. Mr. Chairman, as Fannie Mae and Freddie Mac languish in 
Federal conservatorship following their collapse from the 2008 housing 
crisis, it is high time to apply FOIA to these GSEs and bring 
accountability and transparency for the American taxpayers.
  Mr. CLAY. Mr. Chairman, I yield back the balance of my time.
  Mr. ROSS. Mr. Chairman, as you can see, this is a bill that I think 
has broad bipartisan support. It is something that we need to do for 
the taxpayers who have invested so much into Fannie and Freddie over 
the years. Let's make them subject to FOIA.
  I urge support of this bill, and I yield back the balance of my time.
  The CHAIR. All time for general debate has expired.
  Pursuant to the rule, the bill shall be considered for amendment 
under the 5-minute rule.
  In lieu of the amendment in the nature of a substitute recommended by 
the Committee on Oversight and Government Reform, printed in the bill, 
it shall be in order to consider as an original bill for the purpose of 
amendment under the 5-minute rule an amendment in the nature of a 
substitute consisting of the text of Rules Committee Print 115-14 
modified by the amendment printed in part A of House Report 115-96. 
That amendment in the nature of a substitute shall be considered as 
read.
  The text of the amendment in the nature of a substitute is as 
follows:

                               H.R. 1694

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SEC. 1. SHORT TITLE.

       This Act may be cited as the ``Fannie and Freddie Open 
     Records Act of 2017''.

     SEC. 2. APPLICABILITY OF FOIA.

       (a) Applicability to Government Sponsored Entities in 
     Conservatorship.--Section 552 of title 5, United States Code 
     (commonly referred to as the Freedom of Information Act), is 
     amended by adding at the end the following new subsection:
       ``(n) The Federal National Mortgage Association or the 
     Federal Home Loan Mortgage Corporation shall comply with 
     agency requirements under this section during any period such 
     enterprise is under conservatorship or receivership pursuant 
     to section 1367 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4617).''.
       (b) Effective Date; Applicability.--The amendment made by 
     subsection (a) shall be effective on the date of the 
     enactment of this Act and shall apply with respect to any 
     request filed under section 552(a)(3) of title 5, United 
     States Code, on or after such effective date, relating to any 
     record created before, on, or after the date of the enactment 
     of this Act.

     SEC. 3. COMMERCIAL REQUESTERS.

       For purposes of subsection (n) of section 552 of title 5, 
     United States Code, as added by section 2(a), each enterprise 
     described in such subsection shall establish a fee schedule 
     such that in the first year the fees collected from requests 
     for records intended for a commercial use cover the costs of 
     administering such subsection (n), which shall be estimated 
     as $40,000,000 in the first year. In each subsequent year, 
     each such enterprise shall evaluate whether the fees 
     collected under the prior year's fee schedule were sufficient 
     to recover all actual costs of administering subsection (n) 
     and revise the fee schedule to recover the costs of 
     administering subsection (n) in the following year and any 
     outstanding costs of administering subsection (n) from the 
     prior year not collected through fees in the prior year. Each 
     such enterprise shall make the revised fee schedule and a 
     detailed explanation of the prior year's costs and 
     projections of future costs that were used to justify the fee 
     schedule publicly available online for 10 days prior to the 
     fee schedule going into effect.

  The CHAIR. No amendment to that amendment in the nature of a 
substitute shall be in order except those printed in part B of House 
Report 115-96. Each such amendment may be offered only in the order 
printed in the report, by a Member designated in the report, shall be 
considered read, shall be debatable for the time specified in the 
report equally divided and controlled by the proponent and an opponent, 
shall not be subject to amendment, and shall not be subject to a demand 
for division of the question.


                  Amendment No. 1 Offered by Mr. Ross

  The CHAIR. It is now in order to consider amendment No. 1 printed in 
part B of House Report 115-96.
  Mr. ROSS. Mr. Chairman, I have an amendment at the desk, as the 
designee of the gentleman from Utah (Mr. Chaffetz).
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 1, strike line 10 and all that follows through line 16 
     and insert the following:
       ``(n)(1) This section shall apply to the Federal National 
     Mortgage Association and the Federal Home Loan Mortgage 
     Corporation during any period either such enterprise is under 
     conservatorship or receivership pursuant to section 1367 of 
     the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4617).
       ``(2) For purposes of this subsection, the exemption 
     described in subsection (b)(4), relating to trade secrets and 
     commercial or financial information, shall apply without 
     regard to whether such information was obtained from a person 
     outside the Federal National Mortgage Association or the 
     Federal Home Loan Mortgage Corporation, as the case may 
     be.''.
        Page 1, line 18, after ``on the date'' insert the 
     following: ``that is six months after the date''.

  The CHAIR. Pursuant to House Resolution 280, the gentleman from 
Florida (Mr. Ross) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Florida.
  Mr. ROSS. Mr. Chairman, the manager's amendment that I am offering on 
behalf of Chairman Chaffetz makes technical and conforming changes to 
the bill.
  Applying FOIA to Fannie and Freddie while the entities remain in 
conservatorship will better ensure that the American people know what 
their government does with their taxpayer dollars. But, if and when 
Fannie and Freddie come out of conservatorship, the entities need to be 
able to operate as commercially competitive businesses.
  This amendment clarifies that Fannie and Freddie may use exemption 4, 
which protects sensitive commercial information from disclosure, 
regardless of whether information was obtained from a person outside of 
Fannie or Freddie, to protect their financially sensitive materials 
from public disclosure.
  Mr. Chairman, recognizing the administrative labors involved in 
setting up FOIA shops, the amendment also addresses the implementation 
date. Fannie and Freddie will likely need to hire staff, update their 
websites, and identify records to be made publicly available as a 
matter of course.
  The manager's amendment, therefore, provides Fannie and Freddie 6 
months after the bill's enactment to establish their respective staffs 
and protocols to administer FOIA.
  Mr. Chairman, I urge adoption of the amendment, and I reserve the 
balance of my time.
  Mr. CLAY. Mr. Chairman, I claim the time in opposition, but I am not 
opposed to the amendment.
  The CHAIR. Without objection, the gentleman from Missouri is 
recognized for 5 minutes.
  There was no objection.
  Mr. CLAY. Mr. Chairman, I rise in support of this amendment, which 
would make improvements that address concerns raised by FHFA.
  The manager's amendment would make several important improvements to 
the underlying bill. This amendment would provide Fannie and Freddie 6 
months to implement the bill. This time is important to ensure they 
have staff and procedures in place to process FOIA requests.
  This amendment would also clarify that Fannie and Freddie could use 
exemption 4 of FOIA in the same way that FHFA can currently use it to 
protect trade secrets and commercial or financial information generated 
by Fannie and Freddie.
  Exemption 4 protects ``trade secrets and commercial or financial 
information obtained from a person and privileged or confidential.'' 
Exemption 4 requires that that information can only be protected if it 
comes from an outside source rather than being generated by an agency 
itself.
  Without the language added by this amendment, there would have been 
uncertainty as to whether confidential business information that would 
have been protected if Fannie or Freddie sent it to FHFA would have 
been protected when those entities were, themselves, responding to FOIA 
requests.

[[Page 6073]]

  I appreciate Chairman Chaffetz' willingness to work with us in 
addressing these concerns, and I urge all Members to support this 
manager's amendment.
  I yield back the balance of my time.
  Mr. ROSS. Mr. Chairman, I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Florida (Mr. Ross).
  The amendment was agreed to.


           Amendment No. 2 Offered by Mr. Johnson of Georgia

  The CHAIR. It is now in order to consider amendment No. 2 printed in 
part B of House Report 115-96.
  Mr. JOHNSON of Georgia. Mr. Chair, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 1, after line 16 insert the following new subsection 
     (and redesignate the subsequent subsection accordingly):
       (b) Rule of Construction.--Nothing in this Act may be 
     construed as precluding the application of any of the 
     exemptions described in section 552 of title 5, United States 
     Code, to subsection (n) of such section, as added by 
     subsection (a).

  The CHAIR. Pursuant to House Resolution 280, the gentleman from 
Georgia (Mr. Johnson) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Georgia.
  Mr. JOHNSON of Georgia. Mr. Chairman, I would like to first commend 
Chairman Chaffetz for introducing H.R. 1694, the Fannie and Freddie 
Open Records Act of 2017. I would also like to thank the gentleman from 
Maryland (Mr. Cummings) and members of the committee for all of their 
hard work on this legislation.
  H.R. 1694 would amend the Freedom of Information Act, FOIA, to make 
its provisions apply to Fannie Mae and Freddie Mac when the two 
entities are in Federal conservatorship or receivership. My amendment 
makes commonsense improvements to the underlying bill to ensure that 
all nine FOIA exemptions apply to government-sponsored entities in 
conservatorship.
  By passing this amendment, we will ensure that personal privacy and 
sensitive information is appropriately protected, while ensuring the 
highest level of transparency for the American taxpayers.
  I am pleased to have the support of Chairman Chaffetz on this 
amendment, and I urge all of the Members to support this amendment.
  I yield back the balance of my time.
  Mr. ROSS. Mr. Chairman, I claim the time in opposition, though I am 
not opposed to the amendment.
  The CHAIR. Without objection, the gentleman from Florida is 
recognized for 5 minutes.
  There was no objection.
  Mr. ROSS. Mr. Chairman, FOIA does not require that all records be 
released to requesters. The FOIA statute allows agencies to withhold 
information under nine exemptions, which were designed to protect truly 
sensitive information that would be harmful to important interests if 
released.
  Just last year, Congress clarified that the expectation--and now the 
legal requirement--is that agencies only withhold information when it 
is necessary to prevent harm to the interest that the exemption was 
intended to protect. The Johnson amendment clarifies that Fannie and 
Freddie would be allowed to withhold requested information under those 
nine exemptions, just as any other agency would be permitted to 
withhold information, if the enterprises reasonably foresee that 
disclosure would harm a protected interest.
  Mr. Chairman, I urge my colleagues to support this amendment, and I 
yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Georgia (Mr. Johnson).
  The question was taken; and the Chair announced that the ayes 
appeared to have it.
  Mr. CLAY. Mr. Chairman, I demand a recorded vote.
  The CHAIR. Pursuant to clause 6 of rule XVIII, further proceedings on 
the amendment offered by the gentleman from Georgia will be postponed.


                  Amendment No. 3 Offered by Mr. Clay

  The CHAIR. It is now in order to consider amendment No. 3 printed in 
part B of House Report 115-96.
  Mr. CLAY. Mr. Chairman, as the designee of the gentlewoman from the 
Virgin Islands (Ms. Plaskett), I offer amendment No. 3.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       At the end of the bill, add the following new section:

     SEC. 3. RULE OF CONSTRUCTION.

       Nothing in this Act, or the amendment made by this Act, may 
     be construed as precluding or restricting the disclosure of 
     information regarding any proposed new product or significant 
     new product term prior to loan purchasing, or substantive 
     negotiation with an interested party regarding purchase of 
     loans with such new product or significant new product term.

  The CHAIR. Pursuant to House Resolution 280, the gentleman from 
Missouri (Mr. Clay) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Missouri.
  Mr. CLAY. Mr. Chairman, I rise in strong support of the amendment 
offered by the gentlewoman from the Virgin Islands (Ms. Plaskett). This 
amendment simply makes clear that the application of FOIA to Fannie and 
Freddie will not limit disclosures regarding the loans to which Fannie 
and Freddie offer any type of guarantee or support.
  I agree that Americans have the right to know what loans and other 
agreements Fannie and Freddie are backing. Earlier this year, Fannie 
Mae created a ``pilot program'' under which Fannie has backed a large 
investor's purchase of foreclosed homes that the investor will then 
lease. The public certainly has a right to information about such 
programs.
  As Ms. Plaskett's amendment makes clear, such disclosures should 
occur before any loans are purchased or backed so that Congress can 
assess the potential effects on all stockholders, including taxpayers, 
home buyers, and renters. I appreciate the gentlewoman's thoughtful 
amendment, and I urge all Members to support it.
  I yield back the balance of my time.
  Mr. ROSS. Mr. Chairman, I claim the time in opposition, though I am 
not opposed to the amendment.
  The CHAIR. Without objection, the gentleman from Florida is 
recognized for 5 minutes.
  There was no objection.
  Mr. ROSS. Mr. Chairman, it is imperative that Fannie's and Freddie's 
conservator--the Federal Housing Finance Agency, or FHFA--scrutinize 
new purchasing strategies to ensure that the enterprises' dealings are 
in line with their charters to stimulate homeownership. If FHFA fails 
to guarantee the soundness of their business dealings, FOIA could 
empower the taxpayer to step in and hold accountable Fannie or Freddie.
  For instance, thanks to taxpayers' explicit backing of Fannie earlier 
this year, Invitation Homes, the single-family rental business owned by 
the lucrative private equity firm Blackstone, secured a $1.8 billion 
initial public offering, or IPO, the largest since October of 2015.
  In its IPO filing, Invitation Homes disclosed that Fannie, which 
received over $116 billion from the taxpayers in the aftershock of the 
financial crisis, is guaranteeing up to $1 billion in debt from 
Invitation. While Blackstone gets the money, the taxpayers take on the 
risk; and Fannie pivots unimpeded into the rental markets, leaving 
those hopeful of homeownership with less support.
  Applying FOIA to Fannie and Freddie under this bill strengthens the 
guarantee that government-sponsored entities are fulfilling their 
mandate to stimulate homeownership rather than being in the business of 
supporting profitable, private equity investors on the backs of 
taxpayers.
  Mr. Chairman, this amendment further clarifies the legislation's 
assurance of applicable disclosures as a mechanism to keep Fannie and 
Freddie consistent with their Federal charters to stimulate 
homeownership.
  I urge my colleagues to support this amendment, and I yield back the 
balance of my time.

[[Page 6074]]

  The CHAIR. The question is on the amendment offered by the gentleman 
from Missouri (Mr. Clay).
  The amendment was agreed to.
  Mr. CLAY. Mr. Chairman, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Simpson) having assumed the chair, Mr. Collins of Georgia, Chair of the 
Committee of the Whole House on the state of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 1694) to 
require additional entities to be subject to the requirements of 
section 552 of title 5, United States Code (commonly referred to as the 
Freedom of Information Act), and for other purposes, had come to no 
resolution thereon.

                          ____________________