mr. chairman , this amendment basically is unnecessary . 
it interferes with the gses ' ability to provide stability and liquidity to the residential mortgage market , including during times of crisis , which is mostly important . 
the bill already allows the regulator to address safety and soundness concerns through risk-based capital , minimum capital , and portfolio powers . 
adding this systemic risk language would likely add uncertainty and instability into the secondary-mortgage market , ultimately resulting in a negative impact on the housing markets . 
h.r. 1461 gives the new regulator the same powers and authority that bank regulators have , and more , including the authority to limit the growth of the housing gses for safety and soundness reasons . 
bank regulators do not have the authority to limit growth of banks for undefined systemic risk reasons . 
the royce amendment goes beyond the bank-like regulation . 
similar to bank regulatory authority , h.r. 1461 gives the gse regulator the discretion to increase a gse 's capital requirement , particularly the minimum capital requirement , which effectively empowers the regulator to limit the growth of a gse 's portfolio . 
h.r. 1461 also gives the regulator the authority to adjust risk-based capital , which provides a risk-related measure by which the regulator evaluates all aspects of a gse 's business . 
h.r. 1461 already provides an unprecedented level of authority over the enterprises ' portfolios . 
the bill gives the regulator broad authority over the size and competition of the gses ' portfolios . 
the regulator could force an enterprise to dispose of any asset or liability if the regulator determines that doing so would be consistent with safety and soundness . 
let me quote from the bill itself . 
h.r. 1461 , page 53 : `` notwithstanding the capital classifications of the gse , the director may by order require an enterprise , under such terms and conditions as the director determines to be appropriate , to dispose of or acquire any asset or liability , if the director determines that such action is consistent with the safe and sound operation of the gse. '' by harming the gses ' ability to support our nation 's mortgage market , the royce amendment would endanger housing . 
reducing the size of the gse portfolios for reasons other than those affecting the safety and soundness of the company could negatively impact home buyers and the mortgage market in the following ways : one , increasing mortgage rates for customers ; two , limiting the liquidity available to small lenders to sell their mortgages , and many more . 
i strongly encourage a `` no '' vote for this amendment . 
limiting the gses ' ability to sustain the market in time of crises and keep mortgage rates stable . 
reducing new mortgage product innovation -- limiting the gses ' ability to reach underserved populations and achieve their housing goals . 
conclusions gses are essential to housing market . 
the gses ' mortgage investment activities are crucial to fulfilling their mission to provide liquidity , stability and affordability in the residential mortgage market . 
banks are not obligated to provide liquidity , stability or affordability to the mortgage market . 
they are free to enter or leave the market at any time . 
when market conditions become less favorable , they will shift into other , more profitable investments . 
royce will reduce liquidity . 
arbitrarily forcing the gses to reduce their mortgage investments would reduce liquidity in the mortgage market , hinder the gses ' ability to stabilize the market , and make mortgage credit more expensive . 
