Washington, D.C. – In a letter to the Federal Housing Finance Agency (FHFA), Senator John Ensign today called for the suspension of taxpayer dollars that ultimately end up in the hands of such controversial groups as ACORN, the Association of Community Organizations for Reform Now. ACORN, which is under investigation, is eligible for Fannie Mae and Freddie Mac affordable housing funds, which add up to hundreds of millions of dollars a year.
“With the government takeover of Fannie and Freddie, the government will be taxing itself to create a backdoor slush fund, and we must prevent these taxpayer dollars from going toward ACORN,” said Ensign. “With the recent news tying ACORN with voter fraud, suspending these funds is even more urgent.”
As part of the Housing and Economic Recovery Act of 2008, Fannie and Freddie are required to provide funding for newly created affordable housing funds. This was signed into law prior to the government takeover of the two agencies. Now that the government owns Fannie and Freddie and may provide them with up to $200 billion, taxing these companies does not help create stability, which is the goal of FHFA.
A search warrant was served today on the ACORN Headquarters in Nevada as part of an ongoing investigation into whether employees used false addresses or false names as part of their voter registration operation.
The letter was sent to James Lockhart, the Director of the Federal Housing Finance Agency today. As the regulatory agency overseeing Fannie and Freddie, FHFA has the authority to stop these contributions to the affordable housing funds. Senators Michael Enzi, Jon Kyl, David Vitter, Pat Roberts, Tom Coburn, John Thune and Jim DeMint signed the letter with Ensign.
Continue reading this post for the text of the letter.
October 7, 2008
The Honorable James B. Lockhart III
Federal Housing Finance Agency
1700 G Street, NW
Washington, D.C. 20552
Dear Director Lockhart:
We write today to urge you to exercise your statutory authority to suspend any contributions from Fannie Mae and Freddie Mac to the newly created affordable housing funds, which could direct federal dollars to controversial groups like ACORN.
The Housing and Economic Recovery Act of 2008 requires that Fannie Mae and Freddie Mac set aside an amount equal to 4.2 basis points for each dollar of new business activity and transfer those funds to two newly created affordable housing funds. The Congressional Budget Office estimates that such assessments may equal hundreds of millions of dollars a year for each company. Sec. 1337(b) of 12 U.S.C. 1301, however, gives you the authority to suspend those contributions if the assessments would contribute to the financial instability or the undercapitalization of the enterprises.
Less than one month ago, the Federal Housing Finance Agency (FHFA) placed the enterprises into conservatorship due to concerns over the soundness of the firms and their difficulty in raising sufficient capital to carry out their missions. You said in a Sept. 7, 2008, statement that the companies could not “continue to operate safely and soundly and fulfill their critical public mission” and that “FHFA will act as the conservator to operate the Enterprises until they are stabilized.”
Fannie Mae and Freddie Mac are clearly financially unstable and face significant capitalization problems. One does not need to wait for financial reports to understand that. We strongly believe that taxing the companies hundreds of millions of dollars a year weakens their financial health and is completely at odds with FHFA’s goal of stabilizing the companies and returning them to normal business operations. We urge you to suspend any contributions to the affordable housing funds until at a minimum the enterprises are no longer in conservatorship and to make such a decision without further delay. Thank you for your consideration in this matter.