House Financial Services Committee Chairman Jeb Hensarling is pursuing his own reform proposal and the White House has yet to weigh in, despite Treasury Secretary Steven Mnuchin’s key interest in the subject.
Following is a guide to the important questions that must be resolved.
Will Fannie Mae and Freddie Mac survive?
When the government-sponsored enterprises were seized by the government in 2008 in the midst of the housing crisis, few policymakers expected them to ever emerge again.
The hallmark of recent plans by lawmakers from both sides of the aisle has been an agreement that Fannie and Freddie are wound down.
But that consensus appears to have fallen apart of late. Although previous version of the Senate bill would have eliminated Fannie and Freddie, the latest version is expected to keep them, albeit with added competitors to help avoid concentrating the market risk among two companies.
But that conflicts with Hensarling’s view. “To be clear, Fannie and Freddie must be wound down and their charters repealed,” he said in a speech last month.
How that issue gets resolved will be of crucial importance. Many conservatives won’t support a bill that keep the GSEs alive, but many in the industry are uncomfortable with a world where they don’t exist, fearing big banks could come to dominate the secondary market in the enterprises’ stead.