GSE Bill Avoids Contentious Proposals

Rep. Richard Baker, R-La., has focused his bill on strengthening regulation of the housing GSEs and avoided contentious proposals to cut the enterprises' lines of credit to the U.S. Treasury or authorize the Federal Home Loan Banks to securitize mortgages.Congressman Baker has introduced the kind of bill that is designed to pass this year, one lobbyist said. The bill provides the new government-sponsored enterprise regulator with stronger product approval/rejection authority, for instance, but it does not contain a "bright line" test to contain Fannie's and Freddie's activities, which has generated a fierce debate within the housing industry. "The new Baker bill is both strong and reasonable," said House Financial Services Committee Chairman Michael Oxley, R-Ohio. "I want to indicate strongly the Baker bill is the vehicle for reform in the Financial Services Committee." Rep. Baker told reporters that Rep. Oxley had a hand in drafting the bill. As the chairman of the subcommittee on capital markets and GSEs, Rep. Baker plans to hold at least one hearing on the bill before scheduling a subcommittee vote on the bill in May.