Opening Statements of Committee Members

Opening Statement of Senator Jon S. Corzine (D-NJ)

Hearing on the Mission of the Office of Federal Housing Enterprise Oversight (OFHEO)
and the Financial Safety and Soundness of Fannie Mae and Freddie Mac

Tuesday, May 8, 2001, 9:30 a.m - Dirksen 538

I want to welcome the witnesses and thank them for taking the time to testify before the committee today. I also thank my colleagues, Senators Allard and Reed, for holding this important hearing on the regulatory oversight and the safety and soundness of Fannie Mae and Freddie Mac.

Few would dispute that the mission of the GSE’s – in seeking to make housing more affordable and accessible – is an important one.

One need only look to our nation’s 68% percent homeownership rate – the highest it has ever been – and the increasing number of African-American and Latino families who own their own homes to see that Fannie and Freddie have helped improve the quality of life for American families.

However, this hearing is about the regulatory role of OFHEO and whether our government-sponsored enterprises (GSE’s) operate in a safe and sound manner. The central role that they play in America’s capital, finance and housing markets requires Congress to periodically assess whether they are being well managed, well regulated and held to the highest of standards.

Last fall, Fannie and Freddie reached an agreement with Congressman Baker of the then-House Banking Committee to voluntarily implement six initiatives that would provide additional safety and soundness protections. And it is my understanding that both institutions are well on their way to fully implementing these initiatives. On that note, I applaud the efforts of Mr. Raines and Mr. Brendsel for exercising their leadership and working with members of Congress.

Regarding OFHEO – well, I think one can safely say that this is an agency that has been subject to a lot of questioning and criticism. There are many questions regarding their proposed risk-based capital requirements, and even more questions about the lengthy delay in their release.

While aware that Mr. Falcon inherited much of this problem, I nonetheless look forward to his testimony and his views on what, if any, measures he believes Congress could take to enhance his agency’s performance and credibility.

Again thank you, Mr. Chairman, for holding this hearing and allowing me to present my opening remarks.