Senate GSE Mark-up Set for July 28

Senate Banking Committee Chairman Richard Shelby, R-Ala., said his committee will meet July 28 to mark up a GSE regulatory reform bill.The chairman declined to tell reporters what directive he plans to give the new regulator when it comes to reducing Fannie Mae's and Freddie Mac's giant mortgage portfolios. But he said, "It is going to be a good, strong bill." Sen. Shelby made his remarks after a hearing in which Federal Reserve Board Chairman Alan Greenspan said the two government-sponsored enterprises should not be allowed to invest in mortgage-backed securities and that their liquidity needs would be better served by investing in U.S. Treasury securities. The issue of portfolio limits is a sticking point for Sen. Robert Bennett, R-Utah, who told MortgageWire July 21 that he planned to meet with Sen. Shelby later that day. He noted that the Fed chairman has dropped the idea of placing a hard cap on the size of the GSEs' portfolios and said the issue has boiled down to what kind of guidance Congress should give the regulator. "I want to be supportive as much as I can," Sen. Bennett said. But he said he could not comment further until he is sees the details of Sen. Shelby's bill.