MBA Not Optimistic About GSE Reform

A senior member of the Senate Banking Committee believes Congress will place the government-sponsored enterprises under a new, more powerful regulator before the end of the current session, but the Mortgage Bankers Association's chief lobbyist isn't nearly as optimistic.The MBA's Kurt Pfotenhauer told the Midwinter Conference in Park City, Utah, that there's less than a 50-50 chance the House and Senate will see eye to eye on legislation to place Fannie Mae and Freddie Mac under stricter supervision. And he said that if Congress doesn't act this year, there's a strong possibility the next Congress won't, either. However, Sen. Robert Bennett, R-Utah, told the conference that now that Treasury Secretary Henry Paulson has shown an interest in the question of how best to oversee the GSEs, there's a strong chance the two chambers can reach agreement. "With Secretary Paulson in the mix, the discussions have been more fruitful, and I think we'll get a bill," said Sen. Bennett, who is the second-ranking minority member of the banking panel. But Mr. Pfotenhauer, the MBA's senior vice president for government affairs, said that if a bill doesn't pass in the 110th Congress, "the odds are it will never be passed." And once the GSEs get beyond their financial problems, he added, "the whole issue fades away until there is another triggering event."