Brian Moynihan, CEO of Bank of America, is urging policymakers against getting rid of Fannie Mae and Freddie Mac. Washington is seeking a more balanced role in the home buying market, but Moynihan warns that too much of a government pullout could be disruptive.
Moynihan, in remarks before a panel at the Brookings Institution in Washington, said while there are steps that can be taken to ease the government out of the market, a full government withdrawal would put homeownership out of reach for many borrowers.
“I don’t think changing Fannie and Freddie in some abrupt fashion is wise policy,” he said. “We need Fannie and Freddie. They are critical to the transition.”
Fannie Mae and Freddie Mac, which together have drawn almost $190 billion from the Treasury since being seized by the government in 2008, are at the center of the mortgage-finance debate.
Both Republicans and Democrats have called for the government to shrink and eventually wind down Fannie Mae and Freddie Mac. But the Obama administration and Congress have yet to decide on a specific plan.
“A healthy market needs private capital so the government—and the taxpayer—doesn’t take all the risk,” Moynihan said. “Access to credit is critical.”
“Bank of America CEO Moynihan: Don’t be quick to ditch Fannie and Freddie,” Reuters (Dec. 14, 2012)