Fannie Mae’s request for $3.7 billion from the U.S. Treasury drew criticism from Rep. Jeb Hensarling (R-TX), chairman of the House Financial Services Committee.
The request came after Fannie lost $6.5 billion in the fourth quarter. The loss occurred because Fannie had to “remeasure” its deferred tax assets due to the Tax Cuts and Jobs Act.
“Today’s announcement that Fannie Mae has once again run out of money to pay its own bills is the latest example of why we need to repeal the GSEs’ government charters once and for all,” Hensarling said. “After footing the bill for the costliest bailout in history, taxpayers are sick and tired of getting ripped off by Fannie and Freddie and then scolded by GSE apologists when they complain.”
Hensarling said Congress should enact comprehensive housing finance reform to create a sustainable housing system.
Hensarling called upon Federal Housing Finance Agency Director Mel Watt to suspend payments for Fannie to the Housing Trust Fund, a government fund for affordable housing. Payments to the Housing Trust Fund were suspended in 2008 but reinstated by Watt in 2014.
“The even more troubling aspect of the GSEs financial crisis is FHFA Director Mel Watt’s continued insistence to siphon taxpayer dollars to prop up payments to the Housing Trust Fund that the GSEs cannot afford to make,” Hensarling said. “If the GSEs don’t have the money to pay their own bills, they should not be making optional payments to outside entities. That was an essential part of Director Watt’s 2014 unilateral decision to force Fannie and Freddie to make Housing Trust Fund payments. Director Watt personally guaranteed these rules in his 2015 congressional testimony: ‘If we ever have a draw on the Treasury, that would automatically stop the funding of the Housing Trust Fund.’ I call on Director Watt to do his duty, stand by his word, and immediately suspend these payments.”