The Rudman report on Fannie Mae's accounting problems does not seem to give proponents of GSE reform new ammunition to pass legislation, but Senate Banking Committee chairman Richard Shelby, R-Ala., said he remains committed to pass a bill this year.The report by former Senator Warren Rudman focuses on the failure of accounting and management controls at the government sponsored enterprise. Many of the problems arose in managing the risks associated with Fannie's large mortgage portfolio, Sen. Shelby said. The Alabama senator supports legislation that would force Fannie and Freddie Mac to reduce the size their portfolios. "While a portfolio of this size is not a critical component in achieving their housing mission, it did serve as a mechanism to allow Fannie Mae to ensure earnings growth," Sen. Shelby said. In the House, Financial Services Committee chairman Michael Oxley, R-Ohio, has tentatively scheduled a hearing for March 14 on the Rudman report. Mr. Rudman has agreed to testify.

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