Senate Banking Committee Chairman Richard Shelby, R-Ala., is seeking input from the Government Accountability Office and the Congressional Budget Office on the future of policies dealing with Fannie Mae and Freddie Mac.

In a letter Monday to CBO Director Keith Hall, Shelby requested a report on the implications of the government-sponsored enterprises being allowed to increase their capital by retaining more of their earnings.

Shelby noted that Federal Housing Finance Agency Director Mel Watt had warned in February about the possibility of losses by the mortgage giants. While this has led to some support for higher GSE capital, Shelby said, others say allowing more retained earnings "would allow the GSEs to be reconstituted without providing a commensurate reduction in taxpayer exposure to the multi-trillion-dollar housing finance market.

"Such an outcome could potentially reduce incentives for Congress to enact statutory reforms," Shelby wrote.

In a separate letter to the GAO, Shelby asked the watchdog to report on how the FHFA's oversight affects the GSEs' market dominance, as well as on other areas relevant to reforming the companies.

"Recently … the FHFA has taken steps that appear to encourage a more active, rather than a reduced role in the mortgage market for the enterprises," Shelby said in a letter to Gene Dodaro, the GAO's comptroller general.

The senator wants the CBO to complete its report by the end of July and the GAO to complete its report by Nov. 1.

"It is my hope that GAO and CBO will provide the committee with meaningful data regarding the market impact of FHFA's decisions to ensure that Congress takes steps to protect American taxpayers from risk," Shelby said Monday in a statement.

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.