Reform bill should include Fannie, Freddie-Shelby

WASHINGTON, May 8 (BestGrowthStock) – Financial reform legislation
being debated by the U.S. Senate needs to overhaul government
involvement in U.S. mortgage finance giants Fannie Mae (FNM.N: )
and Freddie Mac (FRE.N: ), Senator Richard Shelby, the lead
Republican on the Senate Banking Committee, said on Saturday.

As the Senate moves toward a final vote on the bill in the
coming weeks, Shelby said it must include reforms for Fannie
and Freddie to address the root cause of the recent financial
crisis.

“For decades, these multi-trillion dollar institutions
leveraged the implicit backing of the American taxpayer to
encourage mortgage lending to people who could not afford to
repay the loans,” Shelby said in the weekly Republican
address.

“But when home prices finally collapsed, these ticking time
bombs exploded, saddling taxpayers with hundreds of billions of
dollars of debt,” he said.

Shelby, who has led negotiations on financial reform for
Republicans, introduced an amendment to the bill last week with
Senators John McCain and Judd Gregg. [ID:nN05138387]

If adopted, the amendment eventually would strip the
agencies of their mandate to promote affordable housing and
reduce the government’s role in mortgage finance.

Shelby also said a proposed consumer protection watchdog
bureau in the Federal Reserve would raise costs for small
businesses and consumers.

Republicans tried but failed to amend the bill this week to
move the watchdog to the Federal Deposit Insurance Corp.
Stock Market Analysis

(Reporting by Roberta Rampton)

Reform bill should include Fannie, Freddie-Shelby