GSE reform unlikely to become law this year -- congressman

by Ryan Smith14 May 2014
A House Democrat is predicting that legislation winding down Fannie Mae and Freddie Mac won’t become law this year.

“The problem is the clock right now,” Rep. Gary Peters (D-Mich.) told Bloomberg. “I think it’s going to be difficult to get anything done this year."

The Senate Banking Committee is scheduled to consider a bipartisan plan to wind down Fannie and Freddie on Thursday. However, the plan – which would replace the mortgage finance giants with a new government insurer and move more risk onto private capital – has faced hurdles in recent days.

Six key Democratic senators – including Elizabeth Warren of Massachusetts – have withdrawn their support for the bill, saying it needed major revisions. That alone could effectively kill the bill; without more Democratic support, it’s doubtful Majority Leader Harry Reid will even bring the legislation to the floor for a full vote.

But even if the senators’ concerns are addressed, any House-Senate agreement on the legislation would mean a lot of bipartisan cooperation that hasn’t happened to far, Peters told Bloomberg.

“There are concerns that the longer we wait the harder it is,” he said. “I think there’s a window. We have to act fairly quickly.”

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