GSE Hearings Slated for Next Week

The House and Senate banking committees are preparing to hold GSE hearings next week that will set the stage for considering legislation to strengthen federal regulation of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.The House Financial Services subcommittee on capital markets, insurance and government sponsored enterprises will meet Feb. 9 to hear testimony from Donald Nicolaisen, chief accountant of the Securities and Exchange Commission. Mr. Nicolaisen ruled that Fannie's reporting of derivative hedging transactions violated accounting rules, and he has directed the GSE to restate its earnings. "This hearing represents the first chance for members of Congress to explore the nature and severity of the Fannie Mae violations since the SEC made a determination about the company's accounting practices," said Rep. Richard Baker, R-La., chairman of the subcommittee. The Senate Banking Committee has tentatively scheduled a GSE hearing for Feb. 10. "We should have details soon," a committee spokesman said.