March 06, 2007

Statement of Chairman Dodd In Response to Bernanke Comments on GSEs

“In my view, there is broad agreement that we should create a new regulator to oversee Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. This new regulator must have a number of core powers in order to do its job effectively, and to be considered credible in the eyes of the public. These powers include: the ability to set both minimum and risk-based capital levels for the Enterprises; enhanced enforcement and prompt corrective action powers, including the authority to set and enforce prudential management and internal control standards; the ability to put a GSE into receivership; and authority over both safety and soundness and mission. The goal in giving the new regulator this broad responsibility is to ensure a more coherent regulatory framework, better enforcement, and a more consistent, deeper, and more aggressive effort on affordable housing at all the GSEs. In addition, I believe that the new regulator must be politically independent and funded outside of the appropriations process. It is my hope that this shared consensus can be the basis for moving strong and effective legislation forward.”