Oversight Urged for Home Loan Banks

The chairman of a federal board that regulates the nation’s home loan banks urged Congress on Wednesday to give tough enforcement powers to a new regulator charged with overseeing government-sponsored housing enterprises.

Ronald Rosenfeld, chairman of the Federal Housing Finance Board, told a House Financial Services subcommittee that such a regulator for the 12 federal home loan banks as well as Fannie Mae and Freddie Mac should have the authority to approve new business activities and the ability to reorganize the enterprises in the event of a financial crisis.

But, Rosenfeld said, Congress should recognize the differences between Fannie and Freddie and the home loan banks as lawmakers move forward with legislation.

“The Federal Home Loan Banks are regionally based, member-owned cooperatives that provide low-cost financing to their members. They do not securitize mortgages,” Rosenfeld said in prepared testimony. “Those differences should be accommodated.”

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