GSE Reform and CFPB Transparency Take Center Stage on Capitol Hill
Author Joshua Rosner appeared in Washington earlier today to talk about government-sponsored enterprise (GSE) reform. That age-old topic that gets brought up time and time again but never really has any headway made about it. While appearing before a group of Investors Unite members, Rosner made it clear that GSE reform could occur, with or without government assistance.
“There are consequences for lack of reform, or improper reform – the wrong kind of change may make things worse,” Rosner said. “Addressing GSE capital stack issues and reform go hand in hand.”
The Investors Unite panel also included ways in which Fannie Mae and Freddie Mac could be reformed and what their potential role could be. In January 2013, the U.S. government began confiscating all of the dividends made by Fannie and Freddie, resulting in their relatively expeditious payback of their bailout. Investors Unite sees a role for a new, sizable mortgage-backing entity called the Federal Mortgage Insurance Corporation, which would, in a way, replace Fannie and Freddie as they exist currently.
Also on Capitol Hill, Consumer Financial Protection Bureau Director Richard Cordray testified regarding the Semi-Annual Report of the Consumer Financial Protection Bureau. “Through our enforcement actions to date, we have aided in efforts to refund more than $3.8 billion to consumers who fell victim to various violations of consumer financial protection laws. We have also fined wrongdoers more than $141 million, all of which has gone into our Civil Penalty Fund and can be used to compensate wronged consumers and, to the extent compensating consumers is not practicable, to pay for consumer education and financial literacy programs,” Cordray testified before the Senate Committee on Banking, Housing and Urban Affairs.
The rest of Cordray’s testimony was essentially patting the CFPB on the back for a job well-done, even in the light of persistent questioning regarding the Bureau’s transparency and scope-of-reach.
“To promote informed financial decision-making, we have continued providing consumers with online resources, including the AskCFPB section of our Web site, where we have answers for over 1,000 frequently-asked questions,” Cordray read during his testimony.
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