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Neugebauer bill left out of GSE reform

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A House subcommittee approved another round of six Republican bills late Tuesday night aimed at reforming Fannie Mae and Freddie Mac. But one was left out. In May, House Republicans announced seven new bills to bring the total number to 15. On Tuesday, the subcommittee held votes on six, electing not to consider one of the bills from Rep. Randy Neugebauer (R-Texas) that would prohibit taxpayers from funding legal fees for former Fannie and Freddie executives. According to a source familiar with the discussions, language in the bill is being reworked and will be re-introduced in the future. The subcommittee did clear other legislation for a full committee vote. These bills would subject the GSEs to Freedom of Information Act Requests, prevented the Treasury Department from lowering the 10% dividend payment the GSEs owe, disposed of their "nonmission critical assets" and capped the total dollar amount on the bailout. Another, which met the most resistance from subcommittee Democrats, abolished the Affordable Housing Trust Fund, which provides resources through the country for housing to low- to middle-income families. But the only one to address a post-Fannie and Freddie housing finance system was introduced by Rep. Steve Stivers (R-Ohio). It would give the Federal Housing Finance Agency the power to not automatically replicate either of the GSEs if they are put into receivership. "Receivership is not being considered at this time, and there is no timetable," Stivers said. "I think this approach makes sense, because it is not automatic and it gives Congress time to build a new model even if the FHFA decides to put Fannie and Freddie into receivership." Neugebauer led an investigation into what executives were charging the GSEs to cover legal expenses after the crisis. Roughly $162 million has been spent defending Fannie, Freddie and former executives there in a variety of lawsuits. Since conservatorship, Fannie alone paid $24 million in legal fees in defense for former CEO Frank Raines ($7.9 million), former Chief Financial Officer Tim Howard ($4.5 million) and former Controller Leanne Spencer ($11.8 million), according to data the congressman released earlier in the year. Beyond the now 14 bills passed by the subcommittee addressing GSE reform, none of the three comprehensive bills that provide replacement for Fannie and Freddie have been taken up. Lawmakers from both side of the aisles demanded subcommittee leaders begin work on these bills, though no hearings have been set. "These bills are the first steps toward GSE reform," said subcommittee chairman Rep. Scott Garrett (R-N.J.). Write to Jon Prior. Follow him on Twitter @JonAPrior.

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