Sen. John McCain, R-Ariz., will offer an amendment to the financial services regulatory reform bill that weans Fannie Mae and Freddie Mac off government support over a five-year period.

The amendment is modeled after a GSE bill crafted by Rep. Jeb Hensarling, R-Tex. Republican senators Richard Shelby (Ala.), Judd Gregg, (N.H.) and others are expected to support the amendment.

Sen. Bob Corker, R-Tenn., noted that the Democrats' bill does not, in any way, deal with the future of the GSEs. (Fannie and Freddie were placed into conservatorship in the fall of 2008 and, to date, have received more than $100 billion in capital assistance from the Treasury.)

The Hensarling approach terminates the conservatorships after two years. If the GSEs are viable, they will be given a three-year transition period to reduce their huge mortgage portfolios and go private.

The McCain amendment would not proscribe a "solution" for Fannie and Freddie, Corker said. But "it puts in place a process to absolutely make sure something happens," he said.

Republicans have been critical of the Obama administration for providing unlimited taxpayer support for the GSEs and not advancing a plan sooner to deal with the mortgage giants.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.