U.S. Representative Ed Royce (R-Calif.), author of the Pay Back the Taxpayers Act of 2015 to prohibit Fannie Mae and Freddie Mac from diverting funds to the Housing Trust Fund while the GSEs are in conservatorship, released the following statement in reaction to the GSEs’ transfer of over $180 million to the fund:
“We must stop the egregious siphoning of money from the GSEs to this housing slush fund,” said Rep. Royce. “I look forward to working with Chairman Hensarling on advancing the Pay Back the Taxpayers Act, which preempts future payments of this kind and sends them where they belong: to the taxpayers. In the interim, lawmakers should conduct vigorous oversight as to where this money is going, who is using it, and what exactly it is being spent on.”
Under current law, the FHFA is required to suspend allocations to the funds if such payments would: 1) contribute to the financial instability of the GSEs; 2) cause the GSEs to be undercapitalized; or 3) prevent the GSEs from successfully completing a capital restoration plan.
Rep. Royce’s Pay Back the Taxpayers Act of 2015 (H.R. 574), introduced on January 27, 2015, removes any ambiguity under the law and states that no funds from Fannie and Freddie can be used to fund the national Housing Trust Fund while the GSEs are in conservatorship or receivership. The bill includes a prohibition on any further transfers from the GSEs to the funds and will require payments that have already been allocated or set aside be instead used to reduce the budget deficit.
Rep. Royce is a senior member of the House Financial Services Committee, with membership on both the Capital Markets and Government Sponsored Enterprises Subcommittee and the Housing and Insurance Subcommittee.
Saat Alety (202-225-4111)