Magazine article Mortgage Banking

Senator Richard Shelby (R-Alabama)

Magazine article Mortgage Banking

Senator Richard Shelby (R-Alabama)

Article excerpt

TO CALL ALABAMA'S SENIOR UNITED States senator "influential" in the current effort to reform the two government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, might be considered in some circles a $3 trillion understatement.

As chairman of the Senate Banking, Housing and Urban Affairs Committee, Sen. Richard Shelby (R) has oversight of the operation and regulation of the nation's financial and housing markets. In his official Senate bio, Shelby describes himself as a "forceful advocate for transparency, accountability and honesty from corporate America."

His advocacy has been apparent throughout the GSE reform debate as he called for a strong GSE regulator to replace the Office of Federal Housing Enterprise Oversight (OFHEO)--the current safety-and-soundness regulator.

Over the summer, Shelby helped shepherd a Republican-backed GSE reform bill through committee--albeit along a strict party-line vote--and on to the Senate floor (see Mortgage Banking, September 2005, p. 8).

To recap, the Federal Housing Enterprise Regulatory Reform Act of 2005 (S. 190) would create and establish a new Federal Housing Finance Agency as an independent agency. The legislation would give the new agency broad power to issue regulations and guidelines, strong authority to better define and enforce charter acts, and flexible authority to set capital requirements over Fannie and Freddie and the Federal Home Loan Banks.

Prior to Shelby's election to the U.S. Senate in 1986, he served four terms in the U.S. House of Representatives and eight years in the Alabama legislature. A fifth-generation Alabamian, Shelby is a graduate of the University of Alabama's undergraduate and law programs.

Mortgage Banking recently interviewed Shelby about the outlook for GSE reform and other legislative trends.

Q: Knowing how much time is left in the congressional session, can you list the priority pieces of legislation you are trying to move? What do you realistically think you will be able to accomplish?

A: The [Senate] Banking [Housing and Urban Affairs] Committee has an ambitious agenda planned for the fall. While the Senate's target adjournment date is the end of September, it is likely that we will be in session through October or later.

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With many issues facing the committee, this represents an opportunity to continue to move on important priorities. These include addressing the expiration of the Terrorism Risk Insurance [Act] program, working to pass deposit-insurance reform, moving the committee's transit-security bill and continuing to seek consensus on strong GSE legislation.

The committee will also continue to examine and consider terrorism finance and money laundering, data-security issues under the committee's jurisdiction, CFTC [Commodity Futures Trading Commission] reauthorization, the CFIUS [Committee on Foreign Investment in the United States] and credit-rating agencies.

In addition, with the devastation caused by Hurricane Katrina, the committee continues to work with regulators to identify areas where we can be of assistance.

In the immediate future, we are concentrating on ensuring that the displaced receive effective housing assistance, and that any necessary short-term flexibilities are granted and bureaucratic obstacles are removed to ensure the timely delivery of services.

In the long term, the committee will look closely at the areas under our jurisdiction where the government can work to ensure that the area is rebuilt and repaired, and that we are doing everything possible to ensure that our citizens are not placed in the same position again. This review will include a close examination of our National Flood Insurance Program [NFIP].

Q: How would you handicap the chances of a GSE reform bill clearing conference committee, being passed in both houses and being signed by the president this year? …

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