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For Immediate Release: October 25, 2005

REPUBLICAN STUDY COMMITTEE MEMBER GOT IT WRONG ABOUT GSE BILL

Washington, DC - Congressman Barney Frank today spoke out about a letter Rep. Gil Gutknecht wrote to the St. Paul Pioneer Press on Friday regarding legislation to reform and regulate the government sponsored enterprises (GSE) Fannie Mae and Freddie Mac. Rep. Gutknecht appears to be misinformed about the provisions of the RSC dictated language.

Frank noted that contrary to Mr. Gutknecht’s letter:

• Affordable Housing Fund money can ONLY be used for affordable housing and related infrastructure.
• The Affordable Housing Fund is NOT taxpayer dollars. In fact, it is an off budget, non-taxpayer financed affordable housing fund paid for with 5% of the after-tax profits of mortgage lenders Fannie Mae and Freddie Mac.
• However, groups should be able to engage in voter registration and help people vote WITH THEIR OWN MONEY. The RSC language prohibits groups and their affiliates from applying for the Affordable Housing fund and doing voter registration efforts even with their own money.

The House on Wednesday is scheduled to consider H.R. 1461, a bill to reform and regulate the government-sponsored enterprises (GSE) of Fannie Mae and Freddie Mac. As part of the reforms, GSE’s will be required to dedicate up to 3.5% in the first two years and 5% thereafter, of their after-tax profits for affordable housing programs across the country-with the first funds available going to hurricane damaged areas of the Gulf Coast. However, Republicans are expected to offer an amendment to the bill that will prohibit faith based groups and non-partisan other non-profits from participating in voter registration and other voting activities if they apply for this fund. This prohibition would even go so far as to ban these activities with their own funds.

In May, conservative members of the Financial Services Committee lost an attempt to remove the Affordable Housing Fund by an overwhelmingly bipartisan vote of 53 to 17. However, the members of the Republican Study Committee (RSC) persuaded Tom Delay to use his power as Majority leader to hold the bill until the House Republicans accepted the demands of the RSC.

“I was pleased to see that Mr. Gutknecht’s letter to the editor called for an open process. In fact, in his words: ‘I strongly believe the language should be adopted through normal procedures in broad daylight,’ and I welcome his support to have an amendment on the floor to strike the unconstitutional voting rights suppression out of the house bill,” said Congressman Frank.

In addition, the notion in Mr. Gutknecht’s letter that the RSC did not “sneak” the unconstitutional language into the bill deserves some clarification. In May, the bill passed the Financial Services Committee on an overwhelmingly bipartisan vote of 65-5. Since then, the RSC has demanded changes in the bill that has not had a hearing, consideration by members of Congress and, in fact, has not even made the language public. The language may even be brought to the House Floor without the option of an amendment to strike out the offending provision.

Mr. Gutknecht’s letter follows:

St. Paul Pioneer Press, October 21, 2005

Ritchie is wrong about amendment

I read with interest the column written by DFL candidate for secretary of state, Mark Ritchie.
Under the headline, "Don't let Congress degrade voting rights," he said I was part of a group that "sneaked" an amendment into a bill that would prohibit organizations from using affordable housing money for political organizing.

Ritchie is wrong when he says I "sneaked" an amendment into the bill. The "amendment" to which Ritchie refers is not yet a part of the bill. I strongly believe the language should be adopted through normal procedures in broad daylight.

He is correct if he meant to suggest this: I believe affordable housing money ought to be used only for affordable housing.

I suspect Ritchie is upset because we may have caught his hand in the cookie jar. Maybe he thinks it's acceptable to use taxpayer dollars for political organizing. I do not.

U.S. REP. GIL GUTKNECHT
Rochester

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The Committee oversees all components of the nation's housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. The Committee continually reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank, the Federal Deposit Insurance Corporation, Fannie Mae and Freddie Mac, and international development and finance agencies such as the World Bank and the International Monetary Fund. The Committee also ensures enforcement of housing and consumer protection laws such as the U.S. Housing Act, the Truth In Lending Act, the Housing and Community Development Act, the Fair Credit Reporting Act, the Real Estate Settlement Procedures Act, the Community Reinvestment Act, and financial privacy laws.