Senate Negotiators Reject Fannie, Freddie Coverage In Financial Bill
June 17 2010 - 8:00PM
Dow Jones News
Senate lawmakers negotiating a financial overhaul measure on
Thursday rejected a proposal to include Fannie Mae (FNM) and
Freddie Mac (FRE) among financially risky entities that could be
liquidated.
The Senate response came almost immediately after House members
agreed to it.
House members of a "conference committee" on the bill earlier
agreed to an amendment, offered by Rep. Jeb Hensarling (R., Texas)
to remove an exemption for Fannie and Freddie from liquidation
coverage.
House Financial Services Committee Chairman Barney Frank (D.,
Mass.) said he accepted the amendment because it makes clear that
the government has the ability to regulate Fannie and Freddie.
Frank also said he expects overall changes on
government-sponsored entities like Fannie and Freddie to be
completed in the next year.
The overall financial bill would give the government regulatory
authority to wind down financial firms that pose an economic
risk.
Republicans have argued for much of the debate on the bill that
Fannie and Freddie should be eliminated or severely restricted.
They have criticized the legislation for not adequately addressing
issues surrounding the government-sponsored enterprises.
A spokesman for Hensarling said removing an exemption for Fannie
and Freddie would be "a small step toward putting them on the same
footing as other failed institutions."
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263;
fawn.johnson@dowjones.com