Fannie Mae, Freddie Mac, and the other government-sponsored enterprises will no longer be able to use the Federal Reserve's payment systems as a source of intraday float, starting in July 2006.The decision by the Federal Reserve Board will increase the GSEs' costs, and it signals another attempt to take away the GSEs' special privileges. Under the new policy, the Fed will charge penalties for daylight overdrafts on the GSEs' corporate account activity, and it will stop releasing interest and redemption payments on securities when a GSE has insufficient funds in its account with the Fed. "The Fed is seeking comment by April 16, 2004 on how best to promote a smooth market adjustment while implementing this change in its Policy Statement on Payment System Risk," the Fed said. By law, the Federal Reserve acts as the fiscal agent for the GSEs, but it has allowed these entities certain privileges that are generally reserved for depository institutions.

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