President Donald Trump mused last week that he was mulling the release of mortgage giants Fannie Mae and Freddie Mac from government conservatorship.
The response from Congress? Sure. Let’s see a plan. “We’ve talked for years about privatizing,” Sen. John Kennedy (R-La.) said. “I really think it’s time to take a good hard look. But I think Congress ought to be involved.”
The first Trump administration tried and failed to release the government-sponsored enterprises. The president’s announcement last week is one of the only concrete signs to come from the White House that this may be a priority.
Fannie Mae and Freddie Mac have been held by the federal government for more than 16 years, when the global financial system shuddered amid a mortgage market meltdown. Conservatives, free market evangelists and investors have been itching to split the companies back out into the private sector ever since.
Hill check: Senate Republicans are enthusiastic about pushing this effort forward, particularly those on the Senate Banking Committee.
“The question will be, how do we do it?” Sen. Mike Rounds (R-S.D.) said. “I’m more than willing to work on that.”
Democrats are a mixed bag. There’s enough interest from them that a concerted effort from the Trump administration could bring in bipartisan support from the Senate, which most folks believe is necessary to finish the job.
But Democrats are far more mindful of the risks of disruption to the mortgage market. There’s real worry about whether the administration is fully weighing those dangers.
“I have some concerns about the idea that you would basically sell off, or auction off, these entities,” Sen. Tina Smith (D-Minn.) said. Trump “seems to be thinking about the money it would raise.”
Sen. Mark Warner (D-Va.) expressed support for a “smart release plan that wouldn’t disrupt the market.”
“But the idea of a fire sale to simply grab dollars to pay for the crazy big, beautiful bill – I’ve got no interest in that,” Warner added.
Rounds countered that he believed the Trump administration would take its cues from the market. “You don’t do it in a vacuum,” the South Dakota Republican said. “You do it talking to the markets, to the folks that are impacted by it. We need a good solid secondary market.”
There’s also the matter of personnel. Warner told us he had faith in someone like Treasury Secretary Scott Bessent to lead that process.
“I’ve worked fairly well with Mr. Bessent,” Warner said. “But the others – I mean, I don’t have a lot of confidence.”
