Hearing on OFHEO/Fannie Mae Agreement on for April 6

WASHINGTON – The Subcommittee on Capital Market, Insurance and Government Sponsored Enterprises will meet April 6 to review the Office of Federal Housing Enterprise Oversight’s (OFHEO) supplemental agreement with Fannie Mae’s Board announced March 8. The April 6 hearing is entitled “Additional Accounting and Management Failures at Fannie Mae: OFHEO’s Efforts to Ensure Safe and Sound Operations.” The supplemental agreement reached by OFHEO and Fannie Mae addresses additional problems with Fannie Mae’s internal control systems, corporate governance, and accounting that have become evident as a result of OFHEO’s examination of the GSE. While commending OFHEO for its work in reaching the agreement with Fannie Mae, Subcommittee Chairman Rep. Richard Baker ((R-La.) said the agreement “also raises many disturbing questions, especially about tampering with records, and we need to know the nature of the records and the extent of this outrageous practice.” Among the features of the agreement, it requires separation of the positions of the chairman of the board of directors and chief executive officer, as well as implementation of controls affecting account ledger entries. It also requires Fannie Mae, if necessary, to restate earnings relating to the newly reviewed accounting standards.