Legislation that could force Fannie Mae and Freddie Mac to significantly reduce their investment portfolios was released Friday by Senate Banking Committee Chairman Richard C. Shelby, R-Ala., the Washington Post reported. By proposing to give a new regulator broad discretion over the kinds of assets Fannie Mae and Freddie Mac can hold, Shelby has followed the course preferred by the Bush administration – but set up a possible conflict with the House, where Financial Services Committee Chairman Michael G. Oxley, R-Ohio, supports a less strict set of rules, the Post reported. Oxley has also been working toward a set of rules for the mortgage giants, whose combined investment portfolios total $1.5 trillion. Fannie Mae has been shrinking its portfolio to bolster its capital cushion ...
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