Today, U.S. Representative Ed Royce (R-Calif.) questioned United States Secretary of the Treasury Jack Lew at the House Financial Services Committee hearing entitled “The Annual Report of the Financial Stability Oversight Council” on the current status of the GSEs and the need to reform them.
“The false narrative that is perpetuated is that the taxpayers have been repaid [by the GSEs], it’s time to end conservatorship, and return the GSEs to the control of shareholders,” said Rep. Royce. “From your comment earlier, I assume you disagree with this narrative, and agree with the conclusion of the [New York] Fed that failing to work to wind down the GSEs and give space for private capital to come in would be a ‘colossal missed opportunity to put U.S. residential mortgage finance on a more stable long-term footing.’“
“I totally agree… the risk is being borne by taxpayers on an ongoing basis and the conservatorship is not over,” answered Secretary Lew. “I would only add one additional thing to what I said earlier which is that the damage done to our economy by the housing crisis was far more than the simple amount of money that was put into the GSEs …read more
Source:: U.S. Rep. Ed Royce