John McCain has been touting his supposed maverick position on the reform of Fannie Mae and Freddie Mac. In a speech on Sept. 19 in Arlington, VA, McCain said, "Two years ago, I called for reform of this corruption at Fannie Mae and Freddie Mac. Congress did nothing. The Administration did nothing. Senator Obama did nothing, and actually profited from this system of abuse and scandal. While Fannie and Freddie were working to keep Congress away from their house of cards, Senator Obama was taking their money. He got more, in fact, than any other member of Congress, except for the Democratic chairmen of the committee that oversees them."
Remarks By John McCain On Our Financial Markets
The later parts of this statement have been addressed elsewhere, i.e., the money Obama received was in the form of individual campaign contributions by the 11,700 Fannie and Freddie employees, who are free citizens and free to make political contributions, unless there is some new provision in the Patriot Act I am unaware of. Let's probe the first half of McCain's statement.
In the (Republican majority) 109th Congress, 2005-2006, bills were introduced in the House and Senate to revamp the oversight of Fannie and Freddie. The House version of the bill was the Federal Housing Finance Reform Act of 2005, HR1461 and the Senate version was Federal Housing Enterprise Regulatory Reform Act of 2005, S190. The bills are very similar and you can read about their differences here: HR1461 vs S190. HR1461 was introduced in April 5, 2005, subsequently amended, and passed the House on October 26, 2005 by a 331-90 vote. S190 was introduced in the Senate on Jan 26, 2005, sponsored by Hagel and co-sponsored by Dole and Sununu. McCain was not a co-sponsor. S190 was discussed in the Senate Banking Committee on July 28, 2005 with the result, "Ordered to be reported with an amendment in the nature of a substitute favorably", which I believe is Congress speak for, "we don't like this, please go rewrite it and we may reconsider", i.e., the bill died in a Republican controlled committee and never came to the floor of the Senate or back to the Senate Banking Committee for reconsideration. S190 died in committee.
On May 23, 2006, Fannie and Freddie's regulator, the Office of Federal Housing Enterprise Oversight, issued the results of their 27 month long investigation of Fannie Mae's shenanigans. The report was widely reported and was scathing in its criticism of Fannie Mae. A NYT article is here: Regulators Denounce Fannie Mae. The actual report is here: OFHEO report. Two days later, in an amazing act of prescience, McCain gets up in the Senate and reveals to the unknowing masses that Fannie Mae has problems by regurgitating some findings of the report and signs on as a co-sponsor of S190. Here is a link to the Senate record: McCain sounds the alarm! That's it. That's what all the fuss is about. Nothing else happened with regard to S190 or HR1461. McCain doesn't say anything else.
And for the icing on the cake, HR1461 and S190 would actually weaken the regulation of Fannie and Freddie. Even the conservative think tank American Enterprise Institute thought these were bad bills: Reform That is Worse Than Current Law. Even Bush thought the bills were too weak: Bush says HR1461 too weak.