FROM THE OFFICE OF PUBLIC AFFAIRS

April 2, 2004
JS-1294

Joint Statement of Treasury Secretary John Snow and Housing and Urban Development Secretary Alphonso Jackson

The bill that Chairman Shelby presented to the Senate Banking Committee incorporated many of the reforms needed for strong oversight of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, and its passage out of the Committee, as proposed by the Chairman, would have been a substantial step forward. However, an amendment adopted by the Committee yesterday would significantly weaken one of the core powers needed for a strong regulator. The amendment could reinforce a false impression that the American taxpayer provides an implicit guarantee to these entities.

To enhance the prudential supervision of the GSEs, the bill should include those reforms proposed by Chairman Shelby, and those referenced in the letter of March 30 from Secretary Snow to Chairman Shelby. The bill, as amended, is now unworthy of the reform efforts that Chairman Shelby and many of his colleagues have championed, and the Administration opposes the bill in its current form.

The Administration will continue to push for the much-needed reforms described in the letter of March 30 to Chairman Shelby, and remains committed to strengthening regulatory and market discipline under existing authorities.

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