Republican lawmakers begin assault on Fannie Mae and Freddie Mac

Republican lawmakers on Capitol Hill are planning to hold a hearing on February 9 to begin tackling reform of government sponsored enterprises (GSE) like mortgage giants Fannie Mae and Freddie Mac. The hearing will be the first in a long series of investigations by Republicans to fix what is viewed as one of the main causes of the 2008 financial crisis.

The first hearing will be held by the Financial Services subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. The focus of the hearing and the ones that follow it will be stopping taxpayer losses on housing in the short term, preventing future bailouts and removing government from the housing markets all together.

Republican Rep. Spencer Bachus of Alabama, chairman of the Financial Services Committee, said in a statement announcing the hearings, “The Committee will be busy this year addressing the issues of concern to Americans: jobs, economic activity, Fannie and Freddie reform, and implementation of Dodd-Frank.”

“We will work to ensure that taxpayers are protected,” he added.

Reform of Fannie Mae and Freddie Mac is shaping up to be a primary area of concern for the GOP as Republican lawmakers figure out how to address the two financial institutions that were left out of the Dodd-Frank Financial Reform and Consumer Protection Act that was passed last summer.

But Republicans are eying the financial overhaul bill as well.

The announcement of the hearings also comes on the heels of a letter Bachus and Republican Rep. Randy Neugebauer of Texas, chairman of the Financial Services subcommittee on Oversight and Investigations, sent to nine federal agencies asking them to provide information on how much implementing the financial reform law will cost.

Those nine agencies — including the Treasury Department, Federal Reserve, Securities and Exchange Commission, and the Federal Trade Commission — were all charged with producing rules and regulations to implement the law.

The letter points out that the Dodd-Frank Act requires 11 agencies to create, among other things, 243 rules of compliance, 59 studies, and 22 new annual reports.

“It is our responsibility to ensure that mandates are not overly burdensome or wasteful of taxpayer,” said the letter.