Press Releases

Bachus: Freddie Mac Losses Underscore Need To End Their Bailouts And Correct Chairman Frank

WASHINGTON, May 6, 2010 -

- Financial Services Committee Ranking Member Spencer Bachus made the following statement after Freddie Mac released its first quarter report for 2010 and news broke of a memo to the White House in which Chairman Barney Frank claimed Fannie and Freddie are not losing any money.  Freddie Mac reported $ 6.7 billion in losses and requested $10.6 billion in taxpayer dollars.

"Today's report is another reminder of the need for this Congress to address Fannie Mae and Freddie Mac as part of regulatory reform legislation.  

"These government sponsored enterprises continue to hemorrhage billions of dollars, pay their executives multi-million dollars a year, and rely everyday on taxpayer dollars to fund their operations. Without real GSE reform, the bailout of Fannie and Freddie will not stop, taxpayers will be forced to continue to dump hundreds of billions of dollars into the companies, and Fannie and Freddie will continue business as usual, contributing to more losses that will only continue this vicious cycle.

"Almost two years ago, the Democrats approved legislation enabling Treasury to bail out Fannie Mae and Freddie Mac. Since then, the Democrats have turned a blind eye to the financial troubles at Fannie and Freddie. The Administration continues to drag its feet on developing a plan, opting instead to poll the public with seven questions, while continuing to throw money at the two enterprises.

"It is deeply regrettable that the White House and House Democrats are resorting to strategic memos and empty rhetoric to defend themselves for having no plan for Fannie and Freddie. Instead of spending their time seeking political cover for policy failures, Democrats should listen to the American people and get to work on a solution to Fannie and Freddie that ends their taxpayer bailouts once and for all.

"While Chairman Frank said in his memo, ‘The losses are the losses that occurred before we took the first step towards reforming them - we the Democrats - and nothing we could do today will diminish those losses,' the reality is that Fannie and Freddie continue to report losses for current operations. The $6.7 billion in losses were from Freddie Mac's operations in the first quarter of this year. Fannie Mae is also expected to report huge losses for the first quarter-- their fourth quarter loss for 2009 was $16.3 billion. The fact that Fannie and Freddie continue to draw on taxpayer  dollars is further proof that the enterprises are losing billions of dollars.

"The time to act is now. We cannot miss an opportunity to reform the GSEs, and protect taxpayers. It is extremely important for this Congress to address the future of Fannie and Freddie reform in financial reform legislation."

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