Chairman Hensarling's Opening Statement at Today's Hearing with FHFA Director Edward J. DeMarco
March 19, 2013 -
House Financial Services Committee Chairman Jeb Hensarling (R-TX) delievered the following opening statement at today's hearing with Federal Housing Finance Agency Director Edward J. DeMarco:
"I would like start off by quoting from our witness’s testimony. ‘Few of us could have imagined in 2008 that we would be approaching the fifth anniversary of the placing of Fannie Mae and Freddie Mac in conservatorship and have made little meaningful progress to bring those government conservatorships to an end.’ I could not agree more.
"And that is why I am determined that today’s hearing will be a truly historic one. I am determined that this hearing will be the last time that Director DeMarco, or if you believe press reports, his successor, will testify before this Committee before we finally and belatedly markup true GSE reform legislation. This I define as legislation to once and for all abolish Fannie Mae and Freddie Mac as government-sponsored enterprises. And two, one that would truly create a sustainable housing policy. Sustainable for our economy, sustainable for those seeking the goal of homeownership, and sustainable for hard-working taxpayers who should never, ever, be called upon again to bailout Wall Street.
"I know this is a heavy lift, especially in divided government, and that is why the leadership of this administration is so critical. Regrettably, they have not released a reform plan. Instead, over two years ago, they issued a white paper of options and simply let it gather dust. The interested public has long since deleted the PDF file from their hard drives.
"After four and a half years, inaction is no longer an option because GSEs were at the epicenter of the financial crisis. They were part of a tragically misguided government policy to incentivize, browbeat, and mandate financial institutions to loan money to individuals to buy homes they could not afford to keep. Consequently, millions saw the American dream turn into the American nightmare. Millions more were forced to contribute to what has proven to be the mother of all taxpayer bailouts. And shamefully, instead of being reformed, Washington continues to functionally grant them a monopoly.
"So part of today’s hearing will focus upon of what FHFA is currently doing to reduce the size and influence of the GSEs and how to accelerate that process with the goal of repealing their government charters in the foreseeable future, and help lead us towards a truly sustainable housing finance system."