Representative Ed Royce (R-CA) introduced H.R. 3901, “The Pay Back the Taxpayers Act,” on January 16. The legislation, if enacted, would prohibit the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac from making contributions to the National Housing Trust Fund (NHTF) and Capital Magnet Fund (CMF) if the entities are in conservatorship or receivership. The bill would direct any profits made by the GSEs to reducing the federal deficit.
The Housing and Economic Recovery Act of 2008 authorized the NHTF and CMF and called for the funds to be capitalized with contributions from the GSEs. Shortly after the law was enacted, the GSEs were taken into conservatorship due to their financial instability at the time, and the contributions were temporarily suspended before they began. While the GSEs have been profitable since 2012, the Federal Housing Finance Agency (FHFA), which serves as the conservator of the GSEs, has not lifted the suspension. NLIHC and many others are calling on the new FHFA Director Mel Watt to do so as soon as possible (see Memo, 1/24).
H.R. 3901 has been referred to the House Committee on Financial Services. As of this writing, 21 Republican members of the Financial Services Committee have cosponsored the measure, including Committee Chair Jeb Hensarling (R-TX). No markup or other Committee actions have been scheduled on the measure to date. In 2013, the Committee approved the Protecting American Taxpayers and Homeowners (PATH) Act, which would privatize the GSEs, and abolish the NHTF altogether (see Memo, 7/12/13). It appears unlikely that the full House of Representatives will consider the PATH Act before the end of the 113th Congress.