Senate Banking Committee Passes GSE Legislation
The Senate Banking Committee today passed S. 1656, the Federal Housing Enterprise Regulatory Reform Act of 2004. The legislation contained an ICBA-backed amendment sponsored by Senators Robert Bennett (R-UT) and Michael Enzi (R-WY) to give Congress the right to veto the appointment of a receiver to wind down a failing GSE.
Under the Bennett/Enzi amendment, the new GSE regulator would be required to notify Congress of its intent to appoint a receiver. Congress, then, will have 30 days to vote to reject the appointment. If Congress does not act, the receiver is appointed by default. In order to assure adequate time for Congress to act, the motion to disapprove the appointment of a receiver will be considered a "privileged motion," meaning it would not be subject to a filibuster. If Congress is not in session when notification is made, Congress will have 45 days to reconvene and consider a motion.
This amendment, slightly revised from an earlier version, is critical to avoid a disruption in the housing markets and to reinforce the support of the government for the housing GSEs. ICBA also worked with Senator Enzi on two separate amendments, which were adopted, to (1) clarify that the mission of the FHLBanks includes providing liquidity and economic development funds to community financial institutions, and (2) to require that a study on limiting depository institutions' investments in GSEs also takes into account what other investments would be available to replace those investments.
ICBA congratulates the Senate Banking Committee for approving these ICBA-backed amendments, and extends our gratitude to Senators Bennett and Enzi for their hard work in fashioning language that was acceptable to the Committee. ICBA was the only national banking trade association to actively lobby for the Bennett and Enzi amendments.