This coalition letter signed by 26 organizations and leaders – representing millions of Americans – urges members of the Senate Banking Committee to reject the housing-finance overhaul put forth by Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho). The signatories believe government-sponsored enterprises (GSEs) should be wound down, but it is no solution to replace Fannie and Freddie with a new federal entity, the Federal Mortgage Insurance Corporation.
The signatories object to Johnson-Crapo’s explicit guarantees of trillions of dollars in mortgages, and are seriously concerned with the creation of housing “trust funds,” which could be misused as slush funds for political purposes. As longtime defenders of property rights, we also oppose the bill’s language permitting the federal government to claim GSE profits in perpetuity, in violation of shareholders’ basic ownership rights.
We urge the committee to reject Johnson-Crapo and instead pursue reforms that would restore the private housing market without creating a massive new bureaucracy or infringing on shareholders’ rights.