For the second time in as many years, the House of Representatives will consider a bill that would permanently ban the use of funds raised from Fannie Mae and Freddie Mac’s guarantee fees to cover federal spending in areas not related to mortgages.
Two years ago, Congress fought over the use of g-fees as budgetary offsets. At the core of that fight was the potential use of g-fee funds to pay for a portion of a massive transportation bill.
That fight led to the removal of a controversial “pay-for” — the mechanism which funds the bill — that would have significantly delayed scheduled cuts in g-fees.
That fight also led to the introduction of the Risk Management and Homeowner Stability Act of 2016, which would have ended the government’s ability to use g-fees for other federal spending measures.
The bill was unsuccessful, but now, the bill’s sponsors are reintroducing it for 2017.
On Tuesday, Rep. Mark Sanford, R-SC, along with Rep. Brad Sherman, D-Cali., introduced the Risk Management and Homeowner Stability Act of 2017, tagged in the House as H.R. 916.
As its previous version called for, the bill would amend the Budget Control Act of 1974 to ensure that guarantee fees cannot be used to offset spending unrelated to protecting the mortgage market, Sanford’s office said.
“This bill simply ensures that guarantee fees can’t be used as a budgetary offset outside of their intended purpose, which is to provide stability for the mortgage market,” Sanford said.
“G-fees should be used to protect taxpayers from risk, but using them to fund unrelated programs weighs down homeowners with an unnecessary burden, exposes taxpayers to additional risk, and prevents Fannie Mae and Freddie Mac from appropriately managing this risk,” Sanford continued.
“Using g-fees to pay for unrelated spending means that homeowners become a de facto national piggy-bank for Congress,” Sanford added. “This bill simply ensures that the promise that came when these fees were created is the promise kept.”
Sherman, the bill’s co-sponsor, said that the bill will ensure that g-fees are used properly.
“Past proposals have attempted to use g-fees to pay for unrelated government spending on the backs of homeowners,” Sherman said. “G-fees are a critical risk management tool, and they should continue to be used only for that purpose.”