In Secretary of Treasury John Snow's recent testimony to the House Financial Services Committee, Snow confirmed the Bush Administration's stance that the Federal Home Loan Banks, along with Freddie Mac and Fannie Mae, should be regulated under the new regulatory agency set to be formed under the Department of the Treasury.

This has been a welcome move for both the GSEs and the FHLBs because the Office of Federal Housing Enterprise Oversight (OFHEO) - which currently oversees Fannie and Freddie - and the Federal Housing Finance Board - which regulates the FHLBs - have not been considered very efficient regulators by the market, sources said.

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