By: Rob Bryson and Maryam Karimi
The Freedom of Information Act (“FOIA”), enacted in 1967, provides the public, individuals and corporations, the presumptive right to access and obtain records from any federal government body, unless such records meet one of the nine exemptions or is protected under special law enforcement record exclusion.
On April 27, 2017, the House unanimously passed H.R. 1694, the Fannie and Freddie Open Records Act of 2017. H.R. 1694 would make the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) subject to FOIA. Fannie Mae and Freddie Mac are government-sponsored enterprises and are the two largest corporations that back home mortgages and student loans. Fannie Mae was established in 1938 by amendments to the National Housing Act. Freddie Mac was established in 1970 by the Emergency Homes Finance Act of 1970.
Currently, these two agencies are not classified as federal agencies and as such they are not required to release records to the public although they are government sponsored and under the conservatorship or receivership of the Federal Housing Finance Agency (“FHFA”).
Fannie Mae and Freddie Mac exert extraordinary influence over the lending market for housing and student loans. They enjoy special status and are backed by the federal government. Yet, despite their favored position, they are not subject to the same oversight as other federal agencies.
Both lending giants have been subjected to repeated condemnation for manipulation of the market, incompetence, aggressive tactics (such as marketing to students), and bestowing large bonuses after spectacular failures (particularly in the aftermath of the 2008 Recession).
Public oversight of these agencies is crucial, especially since the Great Recession. Fannie Mae and Freddie Mac are extensions of the federal government and should be subject to public scrutiny on the same scale as any other government agency. Moreover, the cost of responding to FOIA requests will be passed onto commercial users requesting records. According to the Congressional Budget Office (“CBO”), revenues will not change. H.R.1694 will increase spending by $10 million between 2018 and 2027.
Currently, the bill is stalled in Senate in the Committee on the Judiciary.