CONTENTS Page John W. Snow, Secretary, U.S. Department of the Treasury, Washington, Response to written questions of: Mel Martinez, Secretary, U.S. Department of Housing and Urban Develop- Response to written questions of: Franklin D. Raines, Chairman and Chief Executive Officer, Fannie Mae Prepared statement Norman B. Rice, President and Chief Executive Officer, Federal Home Loan Bank of Seattle Preared statement 48 87 Page ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD Letter to Robert Ney, a U.S. Representative in Congress from the State of Ohio and Maxine Waters, a U.S. Representative in Congress from the State of California from Franklin D. Raines, Chairman and Chief Executive Officer, Fannie Mae, dated September 12, 2003 submitted by Senator “Potential Costs Related to the SEC Registration of the FHLB's Stock,” by the First Manhattan Consulting Group dated October 15, 2003 submitted John T. Korsmo, Chairman, Federal Housing Finance Board Armando Falcon, Jr., Director, Office of Federal Housing Enterprise Response to written questions of: Douglas Holtz-Eakin, Director, Congressional Budget Office Response to written questions of: John D. Koch, Executive Vice President and Chief Lending Officer, Charter One Bank, NA, Cleveland, Ohio, on behalf of America's Community Bankers, Dale J. Torpey, President and CEO, Federation Bank, Washington, Iowa, Response to written questions of: Senator Shelby Senator Hagel Senator Reed Allen J. Fishbein, Director for Housing and Credit Policy, Consumer Federa- tion of America, on behalf of National Association of Consumer Advocates, National Community Reinvestment Coalition, National Congress for Com- munity Economic Development, National Fair Housing Alliance, and Con- sumer Federation of America Prepared statement Robert M. Couch, Chairman, Mortgage Bankers Association Prepared statement Response to written questions of: Senator Shelby Senator Hagel Iona C. Harrison, Realty Executives-Main Street, U.S.A., on behalf of the National Association of REALTORS® Prepared statement 214 241 254 256 256 216 243 218 245 257 258 219 246 Page Opening statement of Chairman Shelby Opening statements, comments, or prepared statements of: Senator Dole 262 WITNESSES Managing Director, Financial Markets and Community Investments, Prepared statement Alan L. Beller, Director, Division of Corporation Finance, U.S. Securities Response to written questions of Senator Reed Richard S. Carnell, Associate Professor of Law, Fordham University School James R. Rayburn, President, National Association of Home Builders WITNESS 373 402 System, Washington, DC Prepared statement Response to written questions of: Senator Shelby Senator Allard Senator Reed Senator Dole 407 425 427 435 WITNESSES Franklin D. Raines, Chairman and Chief Executive Officer, Fannie Mae Richard F. Syron, Chairman and Chief Executive Officer, Freddie Mac Senator Hagel Senator Reed Norman B. Rice, President and Chief Executive Officer, Federal Home Loan Bank of Seattle Prepared statement Response to written questions of Senator Reed 530 530 448 525 539 PROPOSALS FOR IMPROVING THE REGULATION OF THE HOUSING GOVERNMENT SPONSORED ENTERPRISES THURSDAY, OCTOBER 16, 2003 U.S. SENATE, Washington, DC. The Committee met at 10:12 a.m., in room SD-538, Dirksen Senate Office Building, Senator Richard C. Shelby (Chairman of the Committee) presiding. OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY Chairman SHELBY. The hearing will come to order. I would first like to welcome Treasury Secretary Snow and HUD Secretary Martinez again to the Committee. They are no strangers here. It is a pleasure to have both of you back. That will be our first panel. Our second panel of witnesses will be Franklin Raines, Chairman and Chief Executive Officer of Fannie Mae; George D. Gould, Director of Freddie Mac; and Norman Rice, President and CEO of the Federal Home Loan Bank of Seattle. Today's hearing focuses upon a very important topic: improving the regulation of the housing Government Sponsored Enterprises, or GSE's, as they are commonly known. The mission of the housing ĞSE's is one I strongly support. Federal Home Loan Bank advances are a vital link to the capital markets for financial institutions nationwide. The secondary mortgage market access that Fannie Mae and Freddie Mac provide also serves as an important source of liquidity for our Nation's mortgage market. By enhancing liquidity, the Enterprises make possible the lending activity that is critical to economic growth and to expanding homeownership. The enterprises are large institutions. Collectively, Fannie Mae and Freddie Mac carry $1.6 trillion in assets on their_balance sheets and have outstanding debt of almost $1.5 trillion. The Federal Home Loan Bank System is not far behind, with combined assets of over $780 billion and outstanding advances to member institutions of $495 billion. Due to the importance of the housing GSEs' mission and the size of the assets, I believe that the Enterprises require a strong, credible regulator. I remain concerned that the current regulatory structure for the housing GSE's is neither strong nor credible. (1) |