The new regulatory agency for Fannie Mae, Freddie Mac, and the Federal Home Loan Banks proposed by Senate Banking Committee Chairman Richard Shelby, R-Ala., would be responsible for approving new products and lines of business and overseeing compliance with affordable housing requirements.The new agency, run by an executive director in consultation with a panel of three high government officials, would take over all the Department of Housing and Urban Development's responsibilities for government-sponsored enterprises. Sen. Shelby's bill does not change the affordable housing goals for Fannie and Freddie, but the GSEs would have to give advance notice before launching a new program or line of business. Once notice is given, the GSE regulator would have 45 days to approve or deny a request for a new program -- otherwise it would be approved by default. Only 30-days' advance notice is required to modify existing products. The secretary of HUD, the secretary of the Treasury, and the chairman of the Securities and Exchange Commission would serve on the panel overseeing the GSE regulator. The Senate Banking Committee is scheduled to vote April 1 on the GSE bill.

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