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Hopes fade for bill to end Fannie, Freddie

 

WASHINGTON – May 16, 2014 – The Senate Banking Committee on May 15 passed a bill that would dissolve Fannie Mae and Freddie Mac. However, the measure did not attract a large enough majority of votes, and it's unlikely to reach the Senate floor this year.

Proponents failed to win over a key bloc of liberal Democrats, and Senate Majority Leader Harry Reid (D-Nev.) is unlikely to move the measure to the full chamber without their support.

Some Democrats and some Republicans voted against the bill, generally disagreeing whether the current bill went too far or not far enough.

Democrats who opposed the bill were concerned about limiting access to affordable housing for lower-income buyers and enabling a few Wall Street players to dominate the mortgage market. Meanwhile, Republican opponents said the bill was too complex and, under the current bill's language, still kept taxpayers on the hook to support Fannie Mae and Freddie Mac in a future financial meltdown.

The Obama administration backed the measure.

The initiatives' future is unclear after the November elections. Many housing analysts believe the chances of winding down the mortgage finance giants could erode even further next year if Democrats lose control of the Senate.

Source: Washington Post (05/16/14) ElBoghdady, Dina

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