Senators Attempt to Chip Away at Housing Reform with “Jumpstart GSE Reform Act” and Budget Amendment
By: Kristie D. Kully, Andrew L. Caplan
Senators Bob Corker (R-TN), Mark Warner (D-VA), David Vitter (R-LA), and Elizabeth Warren (D-MA) have introduced legislation that, if enacted, may make a partial dent in the U.S. housing reform effort. The “Jumpstart GSE Reform Act” (the “Legislation”), introduced on March 14 in the Senate Committee on Banking, Housing and Urban Affairs (the “Senate Banking Committee”), would prevent any increase in guarantee fees (“g-fees”) imposed by Fannie Mae and Freddie Mac (the “GSEs”) from offsetting other government spending. The Legislation would also prohibit the sale of GSE preferred stock by the United States Treasury (the “Treasury”) without Congressional approval and structural housing finance reform. Furthermore, on March 22, Senator Tim Johnson (D-SD), chairman of the Senate Banking Committee, offered a bipartisan amendment (the “Amendment”) to the Senate budget that would prohibit Congress from using g-fee increases to offset additional government spending. The Amendment was agreed to in the Senate by unanimous consent. Although this budget will not become law, the Amendment shows growing support for this issue. Read More