“Now or Never” for GSE Reform

Federal Reserve Governor Jerome Powell delivered remarks last week at American Enterprise Institute and gave his opinion on reforming the Government Sponsored Enterprises Fannie Mae and Freddie Mac, stating that the time for reform is “now or never”.

The Senate Banking Committee recently held a hearing focused on Fannie and Freddie and Senate Banking Chairman Michael Crapo (R-ID) said he expects reform legislation to be introduced soon. A common theme on both sides of the aisle involves injecting more private capital into the system affording the government more protection.

During the nine years the GSEs have been in government conservatorship there have been several reform efforts, perhaps most notably legislation co-sponsored by Senators Bob Corker (R-TN) and Mark Warner (D-VA) which was reintroduced as recently as 2015.