A coalition of 26 public policy leaders has sent a letter to members of the Senate Banking Committee urging them to reject the latest effort to overhaul the U.S. housing-finance system, which would expand government involvement in the housing market. The Johnson-Crapo bill is scheduled to be marked up by the committee on April 29.
“Today, we urge Senate Banking Committee members to reject Johnson-Crapo,” said Competitive Enterprise Institute Snior Fellow John Berlau. “Johnson-Crapo is not reform, but an expansion of the type of government intervention that fueled the housing crisis in the first place. Real reform must focus on restoring the private housing market by reducing both subsidies and overregulation from laws such as the Dodd-Frank Act.”
Specifically, the coalition opposes Johnson-Crapo’s plan to replace Freddie Mac and Fannie Mae with a new federal entity, the Federal Mortgage Insurance Corporation, which would explicitly guarantee trillions of dollars in mortgages and put millions of taxpayers at risk.
According to the letter, Johnson-Crapo raises many concerns:
- New housing “trust funds” not subject to Congressional oversight or constrained by sufficient safeguards to keep those funds’ money from being diverted for political purposes.
- A provision empowering government to violate shareholder rights, impacting community banks, pension funds, and individual investors.
Coalition members include leaders from Competitive Enterprise Institute, Freedom Action, Americans for Tax Reform, FreedomWorks, Council for Citizens Against Government Waste, National Taxpayers Union, Club for Growth, 60 Plus Association, Capital Research Center, National Center for Public Policy Research, Campaign for Liberty, Institute for Liberty, Human Events, Less Government, Small Business and Entrepreneurship Council, American Family Association, Tradition, Family, Property, Inc., American Civil Rights Union, Tea Party Nation, National Tax Limitation Committee, Tea Party WDC, Blue Ridge Forum, Association of Mature American Citizens, Protect America Today, Citizen Outreach.