Johnson-Crapo amendment set to protect homebuyers
Tim Johnson, D-S.D., chairman of the Senate Banking Committee and Mike Crapo, R-ID, ranking member, introduced an amendment that will prevent Fannie Mae and Freddie Mac from financing unrelated spending.
The amendment was added to the Senate's budget bill and passed by unanimous consent by the members of the Senate Banking Committee.
"As the Banking Committee continues to work to build consensus on housing finance reform, I am glad my Senate colleagues recognize the risks of using Fannie Mae and Freddie Mac as piggybanks to finance short-term spending," said Chairman Johnson.
He added, "I am heartened that we could find consensus on a complex issue, and I look forward to finding more common ground in the future."
The Johnson-Crapo amendment requires any future bill using mortgage guarantee fees charged by the government-sponsored enterprises as an offset to be subject to a budget point of order, which then must pass a 60-vote threshold.
"The Senate took an important, bipartisan step today in discouraging the federal government’s use of budgetary gimmicks," Crapo said.
He concluded, "This amendment ensures guarantee fees will be used to protect taxpayers from mortgage losses as intended, rather than some illusory offset."