Lawmaker, Former Lawmaker Disagree About Whether Law Should Be Followed

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Jeb Hensarling isn't interested in whatever laws Mel Watt swore to uphold.

Both Mel Watt and Jeb Hensarling were in Congress in 2008, when that body passed a law requiring Fannie Mae and Freddie Mac to put some of their profits to affordable housing trust/slush funds, depending on your political affiliation. Watt, a Democrat, undoubtedly considers them the former; Hensarling, the Republican head of the House Financial Services Committee, the latter. But that difference has been mostly academic, since for some years after 2008, Fannie and Freddie had no profits to send to the trust/slush funds, and once they starting having profits again, the Treasury Department decided that it wouldn’t mind taking all of them.

This is set to change next year as Watt, who now runs the Federal Housing Finance Agency that oversees Fannie and Freddie, has decided to start following the 2008 law. Hensarling, best known for a series of quixotic efforts to repeal Dodd-Frank, wholesale if possible, would prefer that he didn’t.

Jeb Hensarling (R., Texas), chairman of the House Financial Services Committee, said that by restoring the payments to the trust funds, along with other decisions Mr. Watt has made in the past year, “Washington appears to be rolling the dice again.”

At the hearing, Mr. Watt said he believed he was following his legal mandate by allowing contributions to the funds as the health of Fannie and Freddie has recovered.

Fannie, Freddie Regulator Defends Actions [WSJ]

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