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NAR Testifies to Oppose Shifting Regulation of GSEs

WASHINGTON, DC-The National Association of Realtors yesterday (July 11) testified before a subcommittee of the House of Representatives that shifting regulation of government-sponsored enterprises, Freddie Mac and Fannie Mae, from HUD to the Federal Reserve Board.

By Amy Vaughn | Updated on July 11, 2001

WASHINGTON, DC-The National Association of Realtors’ president-elect, Martin Edwards, Jr., testified before a subcommittee of the House of Representatives yesterday (July 11) expressing opposition to a proposal to shift most of the regulation of Fannie Mae and Freddie Mac from the Department of Housing and Urban Development to the Federal Reserve Board. Edwards testified that legislation to allow the shift would reduce the government-sponsored enterprises’ effectiveness as mortgage investors.

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.

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