WASHINGTON, June 30 A group of six U.S. House
Republicans told the Obama administration they are concerned
Fannie Mae FNMA.OB and Freddie Mac <FMCC.OB could tap into a
new federal loan bond-guarantee program.
The Treasury Department is seeking input on a $2 billion bond
guarantee program established by a small business bill enacted in
2010, which is aimed at providing assistance to those investing in
community development. The government is soliciting public comment on
the program's design, who can participate and how the funds can be
The Treasury Department will guarantee the notes or bonds issued
to support the Community Development Financial Institutions that make
investments for eligible purposes.
The administration is considering how to best structure the
program for lenders that are qualified to access the source of
long-term capital through the Community Development Financial
As it stands now, the program is open to lenders, including
Fannie Mae and Freddie Mac.
But six House Republicans, including Representative Scott
Garrett, a New Jersey Republican who chairs the subcommittee that
oversees Fannie and Freddie, said the government-sponsored
enterprises should not have access to the CDFI Fund.
They expressed their concerns in a letter to Treasury
Secretary Timothy Geithner and Edward DeMarco, acting director
of the Federal Housing Finance Agency, the regulator of the two
government-controlled mortgage finance firms.
"It would be inappropriate to allow Fannie Mae or Freddie
Mac to expand their operations or deviate from their core
activities," the lawmakers said in the letter, which was dated
The lawmakers strongly urged limiting the mortgage giants, which
were both placed into government hands in September 2008, from
expanding their lines of business since it would "contradict the
goals of the GSEs' conservatorship."
(Reporting by Margaret Chadbourn; Editing by Jan Paschal)