The General Accounting Office is recommending that Congress consider a single "hybrid" regulator to oversee Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, but it is expressing no view on whether the new regulator should be under the Treasury Department or a stand-alone regulatory agency.GAO Comptroller General David Walker refused to take sides on the question of the regulator's independence when he testified Tuesday before the Senate Banking Committee. The Bush administration wants the new regulator of the housing government-sponsored enterprises to be under the Treasury, but Senate Banking Committee Chairman Richard Shelby, R-Ala., maintains that the new GSE regulator should be a stand-alone agency. The GAO's proposed hybrid regulator would be run by an executive director with the oversight of an advisory committee, which could include secretaries of the Treasury and of housing, and possibly the chairman of the Federal Reserve Board. This advisory committee could also include independent representatives from Wall Street, the housing industry, and the general public.

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