Fannie Chief Still Holds Hope for Regulatory Reform Bill

Article excerpt

Fannie Mae chairman and chief executive Franklin Raines said Tuesday that he is hopeful that a regulatory reform bill will eventually pass.

He blamed accounting rules for some misunderstandings about the company and vowed to continue investing in manufactured housing.

Speaking at Fannie's annual meeting in Chicago, Mr. Raines reiterated that it supports a bill to create a strong regulator to oversee the housing government-sponsored enterprises. Despite widespread speculation that such legislation is dead, at least for this year, Mr. Raines said the company would continue pushing for it.

"I'm optimistic that this process will work its way through to completion," Mr. Raines said. "It may not be possible to predict the time frame, but we have a very big interest in seeing that this effort is successful, and it will continue to be a key focus and priority of Fannie Mae."

But "these things take time," he said. "They raise complex issues, and they also generate strong views."

For much of the past year Fannie has been locked in a legislative battle with the Bush administration. Though both sides agree that a bill is necessary, the scope and details of a new regulator have been the focus of intense debate.

During his address to stockholders Tuesday, Mr. Raines rebutted criticism from some that the company's business has grown riskier and more diverse. He said Fannie's business is primarily made up of its mortgage portfolio business and fees from lenders for taking on the credit risk of mortgages it buys.

"Some people look at our books and say our business and results are much more complicated than that," Mr. …