Press Release

For Immediate Release: October 4, 2007

Frank Statement on Temporary Lifting of Portfolio Limits

Washington, DC - Rep. Barney Frank (D-MA), Chairman of the House Committee on Financial Services, today released the following statement regarding the temporary lifting of portfolio limits:

“Sometimes when things are not written down they are not as clearly understood as would be desirable, so I am here putting in writing the position I expressed at the press conference yesterday on appropriate responses to the subprime crisis.

“I continue strongly to oppose any partial legislation regarding Fannie Mae and Freddie Mac that would in any way diminish the interest of various parties in the adoption of comprehensive GSE legislation.  Specifically, I have opposed and continue to oppose any legislation that would deal only with raising the jumbo loan limit, or generally increasing the portfolio cap, or any combination of those.

“As we approached the day of the meeting, Senator Schumer, understanding my opposition to any partial legislation that might be seen as diminishing support for a broader bill, asked me if I would consider supporting a bill dealing only with the portfolio caps, which would be limited in two ways.  First, it would be for a limited duration.  Second, it would provide additional portfolio authority almost entirely for subprime loans.  In the interests of working together with my colleagues, I said I would agree to some form of such a proposal, both because I do believe it would be helpful to have increased portfolio capacity for dealing with subprime, as I have previously made clear in both written and oral statements, and because, candidly, I do not think that an increase of this limited sort in the portfolio caps would in any way satisfy Fannie Mae and Freddie Mac’s interest in a broader increase. 

“That is, I do believe that a very limited temporary increase in the portfolio caps could help us deal with the current situation without in any way diminishing the need and support for a broader bill.  I will continue to talk with Senator Schumer about the exact details.  I did tell him that I was amenable to a one year extension, initially, but I am talking to others about the time frame and I will be asking Senator Schumer to consider a six month extension instead.  I believe a six month extension would meet the needs that we have for a temporary accommodation in the purchase of refinanced subprime loans, but would expire quickly enough so that it could not come even close to being an obstacle to the push for a broader bill.  And I continue to be completely opposed to any effort to increase the jumbo loan limit outside of the deliberations on a general bill.”