Seven Republican senators have requested that Senate Banking Committee Chairman Chris Dodd, D-Conn., launch a formal review of the Treasury Department's Christmas Eve decision to pledge unlimited financial support to Fannie Mae and Freddie Mac.
‘Given the last minute nature of this sweeping move, the fact that relatively little notice or explanation was given and that this action seems to solidify Fannie Mae and Freddie Mac as public utilities, we think that this action merits immediate scrutiny by the Senate Committee on Banking, Housing and Urban Affairs,’ the senators wrote in a letter dated Jan. 19.
The senators requesting the action are South Carolina's Jim DeMint, Kentucky's Jim Bunning, Nebraska's Mike Johanns, Texas' Kay Bailey Hutchinson, Idaho's Mike Crapo, Utah's Robert Bennett and Louisiana's David Vitter.
The Treasury's Dec. 24 decision merits immediate scrutiny by the Senate committee, the senators say. In their letter, the senators additionally ask about the timing of the Treasury's announcement, the "impact of a mortgage market utterly dependent on a federal guarantee on taxpayers," and the consequences of Fannie and Freddie's "effective nationalization."
"If these questions seem familiar, Mr. Chairman, they ought to. They were the same questions you raised, in an interview with National Public Radio, when former Treasury Secretary Henry Paulson originally placed Fannie Mae and Freddie Mac into conservatorship," the senators wrote to Dodd.
Earlier this month, Sen. Bob Corker, R-Tenn., wrote to Tim Geithner, also asking the Treasury secretary to explain the uncapping of federal support.
SOURCE: Office of Sen. Jim DeMint