Letter to the Editor of POLITICO

Letter

In 2005, we and every Democrat on the House Financial Services Committee voted with Republican Chairman Mike Oxley and all but five Republicans to create a regulator that would oversee the mortgage giants of Fannie Mae and Freddie Mac -- government-sponsored entities, or GSEs.

Democrats knew then, as now, that GSEs need greater oversight. We were proud to vote with Republican colleagues for reform.

In 2007, after Democrats won a majority in Congress, the new Financial Services Committee chairman made GSE reform a priority. In just five months, Rep. Barney Frank (D-Mass.) brought Democrats and Republicans together and passed a strong reform bill.

We feel compelled to remind our colleague, Ranking Member Spencer Bachus, of these facts in light of his April 26 Opinion piece, which. like other attempts to rewrite history, blames Democrats for the collapse of the economy, the housing market and, of course, Fannie and Freddie.

Republicans controlled Congress from 1995 to 2006. They had every opportunity to pass essential GSE reform. But they failed to act.

That 2005 vote was their only vote on it. But the Bush administration opposed the bill and the Senate never acted. Bachus, unfortunately, overlooks his own party's record of rhetoric without reform.

As numerous witnesses have testified, Fannie and Freddie's role in the secondary market is helpful to our economic recovery by bringing stability to the mortgage market.

If we eliminate the GSEs too soon, we could plunge this market into further decline -- which could stall welcome signs of recovery.

Democrats -- and Republicans, if they join us -- will dismantle Fannie and Freddie's inherently conflicted structure of private ownership with public responsibilities. The president and Frank have already committed to further reform.

As centrist Democrats, we proudly joined Republicans to provide oversight to GSEs, stability to our financial system (TARP) and economic stimulus.

Instead of using myths about continued bailouts or the GSEs as a smokescreen, we are hopeful that one of our GOP colleagues will be the first to join us to vote in favor of the Wall Street reforms that Americans are waiting for.

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