You may recall that we have covered the Minnesota angle to the Durbin Amendment to Frank-Dodd to bring light to the price controls and other measures designed to interfere with debit fees. We joined the Competitive Enterprise Institute, Americans for Tax Reform and 60 Plus in comments to the Federal Reserve last winter on this issue. Our friend and colleague, John Berlau, from the Competitive Enterprise Institute, has an article in National Review “Dodd-Frank’s Fannie Trap” that neatly updates us on this behemoth legislation parading as reform.
Recall that it was Fannie and Freddie that helped drive out nation to the brink of financial melt-down in 2008. It’s now 2011. Where are we?
Fannie and Freddie now securitize nine out of ten (90%) of home mortgages and have unlimited funding from you and me. This does not look Democratic Capitalism to me. That percentage is inverted from where it ought to be; the private mortgage market has been driven out of business by the Feds.
Berlau says there may be good news:
The good news is that a strong bipartisan bloc of more than 320 members of Congress isn’t buying the administration’s line. The legislators have written to regulators demanding the new rules be scrapped. The bad news is that if Congress doesn’t move fast to repeal, delay, or modify the qualified-residential-mortgage provisions, the administration is likely to dig in its heels, and the GSE-expansion option will become more appealing, even to some Republicans. Witness the bill of Rep. John Campbell (R., Calif.), which would create a single GSE potentially more costly than Fannie and Freddie
Thanks for the heads up, John and CEI!