mr. chairman , i thank the gentleman for yielding me this time . 
and i particularly want to thank the gentleman from louisiana ( mr. baker ) xz4000120 for his efforts for years in this area and for the gentleman from ohio 's ( mr. oxley ) xz4003070 work and the gentleman from massachusetts ' ( mr. frank ) xz4001400 work as well . 
when enron was collapsing and sarbanes-oxley was created , the gentleman from louisiana ( mr. baker ) xz4000120 said to me , but you know what ? 
fannie mae and freddie mac do not even come under these laws because they do not come under the 1933 securities act and the 1934 securities exchange act . 
so we thought let us try to get them under it . 
and i can not tell the members the grief that ensued after that . 
all of a sudden fannie mae and freddie mac considered us enemies because we wanted them to play by the same rules that everyone else had to play by . 
and through the work of the gentleman from louisiana ( mr. baker ) xz4000120 and others , fannie mae was forced to come under , voluntarily as they said , the 1934 act . 
and when they did that , all of a sudden all this information about all of their problems started to come out because information was being provided to us . 
this action we are taking today is in response to the information that we have learned about fannie mae and freddie mac . 
i am grateful that the new administrations of these agencies are no longer arrogant like the previous ones . 
i am grateful that we are starting to say that they should have to play by the same rules as everyone else . 
and because of that , the taxpayers will be protected , and the investors will be protected . 
there are parts of this law that i would like strengthened , but this is a good act . 
it deserves our support . 
and , again , i thank our chairman for moving forward , as he always does , in a bipartisan way and for listening to the wisdom of the gentleman from louisiana ( mr. baker ) xz4000120 . 
i rise in strong support of this legislation and appreciate chairman oxley and chairman baker 's efforts . 
fannie mae and freddie mac play a vital role in our housing finance market , yet for far too long these companies have been playing by their own set of rules . 
during this time we 've witnessed massive earning restatements , accounting irregularities , frequent challenges to their regulator 's judgment and authority , and a cookie jar reserve . 
these were all part of a culture of arrogance at the gses , and were enabled by a weak and ineffective regulator . 
with this legislation , we are beginning to correct this very serious situation . 
how serious is the issue of gse oversight ? 
what 's at stake if one or both companies fail ? 
fannie mae and freddie mac have $ 1.6 trillion in combined assets ; $ 1.4 trillion in retained mortgages in portfolio ; $ 1.5 trillion in outstanding debt ; and $ 1.5 trillion in notional derivatives . 
in addition , outstanding mortgage-backed securities guaranteed by fannie and freddie , but held by third parties , total $ 1.7 trillion . 
mr. chairman , in the absence of a world-class regulator to oversee these institutions , we are truly playing russian roulette . 
creating a new regulator is not about punishing the gses -- it is in fact vital to the safety and soundness of our nation 's housing market . 
both investors and taxpayers have a right to know the financial condition of the gses and they deserve a strong , independent regulator that has the resources to oversee their operations . 
there has been and will continue to be vigorous debate about this legislation . 
i want to address a few key issues surrounding this legislation , and share my thoughts on what i hope is ultimately included in the bill that is sent to the president . 
currently , fannie mae and freddie mac are the only two publicly-traded companies in the fortune 500 that are exempt from regulation by the sec . 
the only reason fannie mae and freddie mac were forced to reveal their accounting errors is because in july 2002 , under pressure from congress and the administration , the two companies finally agreed to comply with certain reporting requirements of the securities exchange act of 1934 . 
fannie mae followed through and registered in 2003 , but failed to file a report in the third quarter of 2004 , and is now in the process of restating those reports it did file . 
freddie mac simply never lived up to the agreement . 
i believe all publicly traded firms should play by the same set of rules , and am pleased this legislation codifies the 2002 agreement . 
this legislation should go even further by requiring fannie mae and freddie mac to comply fully with the securities act of 1933 and the securities exchange act of 1934 . 
regarding the powers of the new regulator , due to the enormity of the gses ' holdings , it seems to me we should go even further in empowering this new office . 
economic experts , most notably federal reserve board chairman alan greenspan , have warned this congress that the tremendous concentration of mortgage assets at fannie mae and freddie mac coupled with the dangers associated with interest rate risk may pose a systemic risk , not only to the u.s. capital markets , but indeed the global financial system . 
later today , i intend to support an amendment to empower the regulator to reduce fannie and freddie 's mortgage assets if it determines these assets pose a systemic risk . 
i oppose placing statutory or hard caps on the gses ' portfolios , but consistent with the treasury department 's recommendation , it is prudent we provide the new regulator with the authority to consider systemic risk . 
finally , regarding the affordable housing fund , despite my concern that creating this fund will only deepen the perception the gses are backed by the federal government , those concerns are outweighed by the pressing need for more affordable housing in connecticut and around the country . 
year after year , we vigorously debate the amount of federal funds to allocate for public housing , section 8 and other housing programs , and it is my strong conviction that we must creatively address the affordable housing crisis . 
it seems to me this fund is a worthy solution . 
non-profit organizations and social service providers in connecticut do an amazing job and are continually finding ways to do more with less . 
but the needs are tremendous , and families continue to struggle to find housing where they can safely raise their children and still afford to feed them too . 
it 's time we empowered housing organizations with additional resources to build more affordable units , including in the gulf coast region devastated by hurricanes katrina and rita . 
mr. chairman , while there is more work to be done before congress sends this legislation to the president , i support what we have before us today and encourage my colleagues to do so as well . 
