Senate Banking Committee Chairman Richard Shelby, R-Ala., is leaning toward the creation of a new GSE regulatory agency with a strong executive and a "powerful, prestigious advisory board" composed of high government officials.This regulator of the housing government-sponsored enterprises would be independent of the Treasury Department. However, the secretaries of the Treasury and the Department of Housing and Urban Development would be represented on the advisory board, along with the chairmen of the Securities and Exchange Commission and the Federal Reserve Board. "We need a strong executive and we also need a strong advisory board," Sen. Shelby said at a committee hearing. But Sen. Paul Sarbanes, D-Md., commented that the board would be "loaded" with members who are concerned more about safety and soundness than about the GSEs' housing mission. Sen. Sarbanes argued that the board should be limited to the Treasury and HUD secretaries. Sen. Shelby said he plans to hold more GSE hearings as he prepares to draft a GSE bill for a committee vote in March.

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