Edwards also told the House Subcommittee on Capital Markets, Securities and Government-Sponsored Enterprises that the legislation would make Freddie Mac and Fannie Mae vulnerable to banks looking to control financial markets and limit consumers' financial choices and homeownership opportunities. He said the legislation would effectively cripple the efforts of these companies.

"The Federal Reserve has little experience regulating housing and real estate-related entities," said Edwards. "We believe the central bank may have a natural conflict of interest in that the Fed's primary mission is to control the nation's money supply by regulating the commercial banking system, particularly the bank holding companies--which are increasingly competing against the GSEs in the secondary mortgage market.

"Furthermore," he continued, "the Federal Reserve has generated its own share of controversy by raising the prospect of classifying real estate brokerage and property management as 'financial activities' under the Gramm-Leach-Bliley Act." While he acknowledged the NAR has not always agreed with the GSEs on all issues, including raising FHA loan limits, he added, "Today's homeownership costs are lower and access to mortgage credit--even for borrowers with blemished credit--is easier and more equitable than ever before, due in no small part to the mortgage investment activities of Fannie Mae and Freddie Mac."