WASHINGTON -- Overhauling, not eliminating, Fannie Mae and Freddie Mac will be the top priorities of Congress' reform efforts next year, Rep. Paul Kanjorski (D-Pa.) told attendees.
Kanjorski, who chairs the subcommittee that oversees Fannie and Freddie, said Congress will begin writing legislation early next year. The changes should be done "with a scalpel," so as to cause them a minimum amount of pain.
He told reporters following his talk that it would be irresponsible, as some Republicans have suggested, to eliminate Fannie and Freddie altogether because liquidating them would cost several billion dollars and deprive credit unions and other financial institutions of a much-needed secondary market. This would decrease consumers' access to mortgages.
Kanjorski told attendees he would continue to push to raise the cap on member business loans from 12.25% of assets to 27% of assets. And he urged the credit union executives to publicize their willingness to help small businesses expand.
"You should go back and open the doors of your credit union and tell everyone to take all the money you have and use it to stimulate the economy."
He declined to state whether or when the House will take up his bill on MBL.
Kanjorski also acknowledged the difficult political environment that Democrats face in this fall's elections but predicted he would win.
"Right now, I am optimistic. We are OK. But the ultimate outcome depends on what the national landscape is. It is going to be close," he told reporters following his speech. Kanjorski is being challenged for the third time by Hazleton Mayor Lou Barletta.