U.S. Rep. Marsha Blackburn, R-Tenn., introduced a bill Thursday addressing the treatment of revenues from the government-sponsored enterprises Fannie Mae and Freddie Mac.
The bill would put Fannie and Freddie’s profits in escrow until GSE reform is achieved.
"We congratulate Rep. Marsha Blackburn for introducing legislation to protect taxpayers, honor obligations to investors and restore the rule of law,” said Investors Unite executive Director Tim Pagliara. "As long as Congress and the Administration remain paralyzed in addressing the fate of Fannie Mae and Freddie Mac, revenues generated from the GSEs should be placed in a reserve fund to cover possible losses of the GSEs, as Rep. Blackburn proposes.”
Pagliara said that this bill would be a meaningful proposal to end the "Third Amendment sweep" and shut off what he says is an illegal revenue stream for the Treasury.
"As top federal government officials have finally started to acknowledge, the undercapitalization of Fannie and Freddie threatens to put taxpayers on the hook for another bailout. This could have been avoided had the GSEs been allowed to keep their profits, as intended under the Housing and Economic Recovery Act. We urge Congress to move quickly to pass this legislation,” he said.