April 5, 2011
Congresswoman Maxine Waters, Ranking Member on the Capital Markets and Government Sponsored Enterprises subcommittee, made the following remarks in her opening statement during the markup of eight bills related to Fannie Mae and Freddie Mac.
“Mr. Chairman, I’d like to thank you for convening this mark-up this morning, and for this Subcommittee’s continued attention to the state of the Government Sponsored Enterprises (GSEs).
As I have said consistently during the 112th Congress, I believe that reform of the GSEs is one of the most serious issues before this Committee, and I am ready to work in a bi-partisan fashion with my colleagues to craft a replacement system that meets the needs of American homebuyers, protects taxpayers and does not stifle our economic recovery.
Mr. Chairman, I am very concerned about the piecemeal approach being represented by the mark-up of 8 small GSE bills today. Naturally, any comprehensive proposal we undertake will inevitably need to include shorter-term provisions to address how we transition from where we are to where we want to be. Those measures must both encourage the return of private capital to the market, while also ensuring that we do not disrupt our housing finance system and shake our nascent economic recovery.
However, undertaking these short-term steps without a vision for what comes next is a risky strategy, given that the entirety of the American housing finance system is at stake.
I believe that this scattered approach will send mixed-signals to the market, and as my Republican colleagues like to say, ensuring market confidence is essential to promoting economic growth. And I am not alone in the belief that this piecemeal strategy is ill-advised.
Last week at the hearing on these bills, industry witnesses cautioned us to move slowly and deliberately, and advocated against a piecemeal approach. I have a letter from the National Association of Homebuilders and the National Association of Realtors to that effect. The Mortgage Bankers Association also stated that they “strongly favor comprehensive legislation that will give more certainty to the markets.” And a coalition of civil rights groups have sent a letter saying the same thing.
Additionally, after House Republicans unveiled the 8 bills being considered today, Senator Shelby, the ranking member of the Senate Banking Committee, called any legislative efforts “premature,” said that the Congress should first undertake more research, and said that “without that examination…[we will] again yield to the temptation of picking a solution before [we have] accurately described the problem.”
Some of the provisions being considered today may be sensible steps, and I am pleased to have the chance to work with my colleagues on refining these bills. But I strongly disagree with a piecemeal approach to reform. We must remember that if we fail to work deliberately or cautiously, or begin to wind-down the GSEs without knowing what comes next, we run the risk of destabilizing our economy. After all, three million more foreclosures are expected in the next year, and home prices are three percent lower than they were last year.
I hope that my colleagues are willing to work with me on comprehensive, bipartisan legislation that protects taxpayers along with our economic recovery, ensures stability and liquidity in our housing finance system, and protects the long-term availability of the 30-year, fixed-rate mortgage.
Thank you, I yield back the balance of my time.”
Committee on Financial Services • B301C Rayburn House Office Building • Washington, DC 20515 • (202) 225-4247
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