Center-Right Groups Want Transparency From Treasury on GSE Profit Sweep
Congress should put the screws to the Treasury Department to disclose all documents pertaining to the origins of the Obama administration’s controversial “net-worth sweep” of Fannie Mae and Freddie Mac profits, according to a coalition of right-leaning public policy groups.
In a recent letter dispatched to the top Republicans and Democrats of the House Financial Services Oversight and Investigations Subcommittee, the 17 groups led by the Competitive Enterprise Institute urged lawmakers to intervene to impose transparency over what GSE shareholders consider an extra-legal maneuver by the executive branch.
Specifically, the letter asks the subcommittee to demand that the Treasury turn over to the committee, or make public, any and all documents which could shed light on “the alleged need for and legal rationale justifying the Third Amendment, as well as all documents detailing the amendment’s development and evolution, such as those customarily contained in the administrative docket for agency rulemaking.”
In August 2012, Treasury altered the terms of the federal government’s conservatorship over Fannie and Freddie. This Third Amendment to the Senior Preferred Stock Purchase Agreements requires both GSEs to initiate a net-worth sweep of nearly all company profits to the Treasury.
In the last quarter, for instance, Fannie and Freddie posted combined net earnings of $5.1 billion – most of which was swept into the Treasury. For more on the story, see the new edition of Inside The GSEs.
