Senator Hagerty:
Director Thompson I would like to direct this to you. You have testified that in order to end conservatorship of Fannie Mae and Freddie Mac, two things need to happen. First, they’ve got to build capital through retained earnings before ending the government’s 15 year long conservatorship. Second, you’ve said that Congress needs to decide the future of these two government sponsored entities and the US mortgage finance system more broadly. On the first point, the quickest way to end the GSE conservatorships is to raise private capital just as bailed out banks were allowed to do in the wake of the 2008 financial crisis. Now that the GSEs control so much of the housing market, there seem to be a reluctance to relinquish government control. I ask myself: Why? Well, judging by the redistributive housing policies that have been pursued while you’ve been at the helm of FHFA it seems that the GSEs are viewed by the Biden administration as simply backdoors to push its DEI social policy agenda which is well beyond your mandate. On the second point, congress has already decided what type of mortgage finance system it wanted with the 2008 HERA law. That law significantly enhanced the regulatory and supervisory powers of your agency over Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The problem here is that the Obama and Biden administrations have never taken their feet off the throats of Fannie Mae and Freddie Mac so that they can succeed as private companies. The responsible thing to do for yourself, for Secretary Yellen and for Attorney General Garland is to continue the work that was begun by former FHFA director Calabria to raise private capital and return Fannie Mae and Freddie Mac to the private markets. This would result in a $100B+ windfall for taxpayers and could be used to immediately to help expand the countries housing supply and support affordable housing for Americans most in need. We talked about this at the time of your confirmation to be the agency head and our housing markets and American taxpayers deserve to see these conservatorships to be brought to an end. I appreciate your full attention to this in the time you have left remaining as director. Thank you.
https://www.banking.senate.gov/hearings/oversight-of-federal-housing-regulators