The Senate Banking Committee passed the Johnson-Crapo GSE reform bill, S. 1217, by a bipartisan 13 to 9 vote. The committee adopted a package of amendments that included an ABA-advocated measure to clarify and limit the authority of the bill’s proposed government reinsurer, the Federal Mortgage Insurance Corporation, and to mandate that it coordinate with other regulators to eliminate duplication.
The bill, which builds upon an earlier bill by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.) and incorporates many policy recommendations from ABA’s committees on GSE policy and the Federal Home Loan Banks, would eliminate Fannie Mae and Freddie Mac and replace them with a new entity — the FMIC — patterned after the FDIC.
The FMIC would provide a guarantee for eligible mortgages originated by the private sector. Mortgages would be packaged for the secondary market through private sector aggregators, guarantors, insurers and securitizers.