Bush Admin. Had a Plan To Create An Agency for Fannie Mae and Freddie Mac In 2003-Truth!

Bush Administration Proposed a New Agency to oversee Housing Industry in 2003-Truth!

Summary of the eRumor:
An eRumor quoting a New York Times article from 2003 that claims "the Bush administration had recommended the most significant regulatory overhaul in the housing industry" in a decade, A new agency would be created under the Department of the Treasury to assume supervision of Freddie Mac and Fannie Mae. The concept was met with opposition by the Congressional Democrats because at the time the lending agencies were not facing any kind of financial crisis.

The Truth:
Stephen Labaton wrote this story for the New York Times and it was published September 11, 2003 and it is still archived at the newspaper.

According to the article, the Bush administration introduced the plan and it was well recieved by Fannie Mae and its leading rivals. It was criticized by the Democrats in Congress and National Association of Home Builders who feared "that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing."

Congressman Barney Frank stated that they two major lenders were not facing any financial crisis at the time.

CLICK for full story from New York Times

updated 09/25/08

A real example of the eRumor as it has appeared on the Internet:

New York Times - Five Years Ago
I thought all of you may be interested in the following article reported in the New York Times five years ago. You won't hear this from the liberal media ! It seems that the Bush administration proposed increased oversight and regulation of Fannie and Freddie, but Democrats fought it.

Here's the article:

"The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios."

Democrats pushed back. "Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing".

"These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis", said Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Representative Melvin L. Watt, Democrat of North Carolina, agreed. "I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing," Mr. Watt said.

Please forward this to all on your list - and especially Independents and Democrats !!!