Washington, D.C. – U.S. Senator Pat Toomey (R-Pa.), the incoming Ranking Member of the Senate Banking Committee, and U.S. Congressman Patrick McHenry (R-N.C. 10th), Ranking Member of the House Financial Services Committee, issued the following statement regarding actions taken by the U.S. Department of the Treasury and Federal Housing Finance Agency (FHFA) to begin the process of exiting the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) from conservatorships:
“Over a decade after the financial crisis, America’s housing finance system remains in urgent need of reform. Today’s announcement by Treasury and the FHFA represents a positive step towards the long overdue exit from conservatorships for Fannie Mae and Freddie Mac.
“For years, the government-sponsored enterprises (GSEs) have been woefully undercapitalized. Ending the profit sweep and raising the cap on retained earnings will allow the GSEs to begin correcting this problem. Additionally, safeguards against risky lending will make future taxpayer bailouts less likely and protect borrowers from loans they cannot afford.
“While it is a missed opportunity that we have not made more progress in restructuring and reforming the GSEs, Congress and the incoming Biden administration must use these actions as a springboard to do more. Hard work will be required to foster an innovative and competitive housing finance market funded by private capital, driven by competition, and less susceptible to needing taxpayer bailouts.”