Group Calls On Congress To End Treasury’s ‘Double-Crossing of Shareholders’
After a federal judge ruled that Congress gave the federal government authority to confiscate 100 percent of the profits earned by Fannie Mae and Freddie Mac, some conservatives are calling on Congress to protect investors.
The opinion was rendered during the dismissal of two lawsuits alleging that the Treasury Department had infringed on the property rights of investors by changing the terms of a 2008 bailout to require the government-sponsored enterprises (GSE’s) to continue forfeiting their profits to the government even after taxpayers are repaid. (RELATED: What the Fannie/Freddie Mess Says About Our Freedoms Slowly Slipping Away)
In dismissing the claims, “Judge Royce Lamberth said Congress had in effect given…the Treasury Department the power to take the companies’ profits as a provision of the Housing and Economic Recovery Act,” according to the Wall Street Journal.
Although similar lawsuits from other investment groups are still pending, the free-market Coalition for Mortgage Security (CMS), has responded to the ruling by calling on Congress to “take action to protect investors” by overturning the so-called “Third Amendment Sweep”.
“If leftists on the bench can’t get it right,” CMS Director Ken Blackwell explained to The Daily Caller News Foundation, “the elected representatives of the people have to do so.” (RELATED: Phony Fannie/Freddie Reform Empowers the Left)
In September, CMS sent a letter signed by 17 member organizations to the House Financial Services Subcommittee on Oversight and Investigations, asking them to demand that the Treasury Department make public “any and all documents shedding light on the alleged need for and legal rationale justifying the Third Amendment.”
Blackwell told TheDCNF that the subcommittee has not yet responded to the letter, but emphasized that Tuesday’s ruling “puts a greater responsibility on Congress to do the right thing.”
Although the current Congress may not have an appetite to take up the issue, Blackwell said “a growing number of members, including Sen. Pat Toomey, believe it is important to protect property rights,” and predicted that, “this November’s elections will recalibrate the terrain.”
Blackwell noted that, “there is a left-right-center coalition emerging to oppose the Sweep,” as well as “a growing awareness among the American citizenry,” as the issue drags on. (RELATED: Fannie and Freddie Shareholders Want a Say in Mortgage Finance Reform)
In addition to protecting private property rights, Blackwell claimed overturning the Third Amendment Sweep would also be beneficial for the economy in general, and for the housing market in particular.
“There’s a reason why well over $2 trillion of capital is sitting on the fence,” he said, which is that “ham-handed moves by the government” are making investors uneasy.
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