Ralph Nader predicts survival of Fannie Mae and Freddie Mac
By Joseph Lawler; Joseph Lawler, Economic Correspondent | |
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Long-time consumer advocate and perennial presidential candidate
That would be a good outcome in Nader's view. He has become the improbable spokesman for a group that advocates for Fannie and Freddie shareholders and opposes a reform bill taking shape in the
Nader said that those hedge funds, which include
"When I started raising the banner for the shareholders, I couldn't find anybody," Nader said. Nevertheless, he's glad to have big-time investors involved, because "they're hiring high-powered lawyers and paying their fees."
Fairholme has sued the federal government for changing the terms of the government's conservatorship of Fannie and Freddie, aiming to reverse a 2012 decision by the Treasury to keep all profits rather than distribute them to shareholders. After receiving a taxpayer bailout totaling
Separately, Fairholme and other investors have pitched the federal government to sell them Fannie and Freddie's mortgage- insurance business, making it a private-sector enterprise.
Nader predicted that something along those lines would come to pass and that the two government-sponsored enterprises would not be shuttered, as both Democrats and Republican lawmakers say they should be. Both a bipartisan bill in the
Instead, Nader said, Fannie and Freddie will continue on, and "the best-case scenario is they preserve the shareholders' chance to recover, they recapitalize and they become like a public utility" with strong government oversight and regulation.
Any of the measures included in the
Nader warned last week that both the bipartisan
In recent weeks, multiple advocacy groups have joined Nader's efforts. The conservative seniors' group 60 Plus launched an ad campaign against senators supporting the bill sponsored by Banking Committee Chairman
Supporters of the Treasury's decision to take all Fannie and Freddie profits and wind down the companies say that it would be a mistake to allow them to remain private companies with an implicit government backstop, and that they have not repaid the government for the risk it took on when they failed at the peak of the crisis.
Federal Reserve Bank of
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