United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office General Government Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1997-07-09 monographic deposited born digital 32 p. GA 1.13:GGD-97-139 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-97-139 P0b002ee18037a106 f:gg97139 DGPO 2010-08-12 2011-03-23 GAOREPORTS-GGD-97-139 machine generated eng fdlp REPORT GAOREPORTS-GGD-97-139 GGD-97-139 Government sponsored enterprises Financial management systems Government guaranteed loans Regulatory agencies Risk management Lending institutions Mortgage loans Agency missions Federal agency reorganization Interagency relations Farm Credit System Letter Report GGD

Pursuant to a congressional request, GAO reviewed the advantages and disadvantages of creating a single regulator for the three housing government-sponsored enterprises (GSE).<p/>GAO noted that: (1) GAO's ongoing work has strengthened its belief that the housing GSE regulators would be more effective if combined and authorized to oversee both safety and soundness and mission compliance; (2) nothing GAO has observed has caused it to modify GAO's criteria for an appropriate regulatory structure; (3) although there have been changes in the regulatory oversight of the housing GSEs since GAO first established these criteria, neither the Office of Federal Housing Enterprise Oversight (OFHEO), Department of Housing and Urban Development (HUD), nor the Federal Housing Finance Board (FHFB) meets all five criteria; (4) in particular, GAO notes that FHFB is not an arm's-length regulator, and it is still involved in governance of the FHLBank System; (5) in addition, regulation of Fannie Mae's and Freddie Mac's mission compliance and safety and soundness is the responsibility of HUD and OFHEO; (6) combining oversight into one agency would have several advantages; (7) such an agency could be more independent and objective than the separate regulatory bodies and could be more prominent than either one alone; (8) although the GSEs operate differently, the risks they manage and their missions are similar; (9) the regulators' expertise in evaluating GSE risk management could be shared more easily within one agency; (10) the primary disadvantage to combing oversight into one agency would be whatever short-term disruption reorganization might cause to the ongoing operations of the regulators; (11) GAO's analysis of different regulatory structures indicated that an independent, arm's-length, stand-alone regulatory body headed by a board would best fit GAO's criteria for an effective regulatory agency structure for the housing GSEs; (12) an independent regulatory body, as opposed to one within an executive branch department, should be better positioned to achieve the autonomy and prominence necessary to oversee the large and influential housing GSEs; (13) using a board to govern the independent regulatory agency would enable Congress to provide for representation that could help ensure the regulator's independence and provide appropriate balance and expertise in the regulators' deliberations of both safety and soundness and mission-related issues; (14) having an independent board would allow it to be structured to provide equal links to HUD, due to its role in hous* https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-97-139/html/GAOREPORTS-GGD-97-139.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-97-139/pdf/GAOREPORTS-GGD-97-139.pdf GAO/GGD-97-139 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-97-139 Letter Report GAO/GGD-97-139; Government Sponsored Enterprises: Advantages and Disadvantages of Creating a Single Housing GSE Regulator; Government sponsored enterprises Financial management systems Government guaranteed loans Regulatory agencies Risk management Lending institutions Mortgage loans Agency missions Federal agency reorganization Interagency relations Farm Credit System Title 5 Section 552b 5 U.S.C. 552b Title 12 Section 1422a Title 12 Section 1427(i) Title 12 Section 1430(i) Title 12 Section 1430(j)(5) Title 12 Section 1430(j)(6) Title 12 Section 1451note Title 12 Section 1462a(c)(3) Title 12 Section 1716 Title 12 Section 4501 Title 12 Section 4512(e)(2) Title 12 Section 4542 Title 12 Section 4542(b)(2) Title 12 Section 4561-4564 Title 12 Section 4 12 U.S.C. 1422a 12 U.S.C. 1427(i) 12 U.S.C. 1430(i) 12 U.S.C. 1430(j)(5) 12 U.S.C. 1430(j)(6) 12 U.S.C. 1451note 12 U.S.C. 1462a(c)(3) 12 U.S.C. 1716 12 U.S.C. 4501 12 U.S.C. 4512(e)(2) 12 U.S.C. 4542 12 U.S.C. 4542(b)(2) 12 U.S.C. 4561-4564 12 U.S.C. 4 Volume 103 Page 3672 103 Stat. 3672 Public Law 94-409 Public Law 99-205 Public Law 99-509 Public Law 101-73 Public Law 102-550