The legislation also would give a new regulator the power to adjust minimum and risk-based capital standards and to disapprove new lines of business at the two government-chartered mortgage finance companies, said Sen. John E. Sununu, a New Hampshire Republican and co-sponsor of the bill.
After accounting errors at Fannie Mae, the Senate Banking Committee will "have more momentum and a greater imperative for passing a bill" than last year, when it approved legislation that stalled in the Senate, Sununu said.
The legislation would subject the companies to stricter provisions than bills that have stalled in Congress since October 2003. The Senate Banking Committee passed a bill April 1 along partisan lines allowing a new regulator, with the approval of Congress, to sell off assets in the event of insolvency at either company.
The bill introduced by Sununu and Republican Sens. Chuck Hagel of Nebraska and Elizabeth Dole of North Carolina wouldn't require the regulator to get Congress' approval before putting the government-sponsored enterprises, or GSEs, into receivership, Sununu said.
"The need for a world-class regulator to increase the safety and soundness of the GSEs has never been clearer," Hagel said.
Sununu said the regulator should have the same authority as the Office of Thrift Supervision, which supervises savings and loans, and the Office of the Comptroller of the Currency, which regulates national banks.
Rep. Richard H. Baker, a Louisiana Republican on the House Financial Services Committee, plans to introduce a bill next month that also would provide for receivership authority.
Fannie Mae and Freddie Mac, which provide money to the housing industry by purchasing mortgages from lenders, have opposed receivership, saying it might provoke doubts among investors on compensation in the event of insolvency and drive up borrowing costs for consumers.
"We will be reviewing the bill and are committed to working constructively and cooperatively," Fannie Mae spokesman Brian Faith said.
Freddie Mac spokeswoman Sharon McHale declined to comment.
Fannie Mae and Freddie Mac own or guarantee almost half the $7.6 trillion mortgage market. Congress created them to expand homeownership by acquiring mortgages from banks with the proceeds from bond sales. Until 2002, the companies were exempt from filing financial statements with the Securities and Exchange Commission.
Sen. Paul S. Sarbanes of Maryland, the senior Democrat on the banking committee, voted against the April 1 bill, saying it could increase the companies' borrowing costs and hamper their ability to fulfill their federal mission to expand homeownership. The committee approved the bill 12-9, with one Democrat voting in favor. Jesse Jacobs, Sarbanes' spokesman, didn't return a telephone call requesting comment.
Fannie Mae's directors ousted Chief Executive Officer Franklin D. Raines and Chief Financial Officer J. Timothy Howard on Dec. 21 after the SEC ruled that, from 2001 until mid-2004, the company made mistakes in accounting for contracts designed to protect its $913 billion of mortgages and mortgage securities from interest-rate swings.