Geithner: Fannie and Freddie next for reform

Geithner said that embattled mortgage lenders Fannie Mae and Freddie Mac will be addressed once work is finished on financial reform.

Treasury Secretary Timothy Geithner said Thursday that embattled mortgage lenders Fannie Mae and Freddie Mac will be addressed once work is finished on the financial regulatory reform bill.

Geithner told CNBC said that he is confident Congress and the White House will move "quickly" to reform the government-controlled firms.

"We certainly welcome the broad support we've heard from Republicans and Democrats about the need to go forward on reform," he said. "And we're going to move on reform of Fannie and Freddie and the broader housing finance system as soon as we get this bill passed."

One of the Republicans' main criticisms of the financial bill that passed the House and Senate over the past few months is that it did not address Fannie and Freddie, which many blame for causing the housing crisis that helped fuel the overall economic meltdown in 2008.

The firms were taken into government conservatorship at the apex of the 2008 financial crisis. The firm has taken billions in government funds, but some Republicans have accused the Obama administration of using them as more of a public policy tool to support specific housing efforts.

Geithner echoed the claims of top lawmakers — expressing confidence that the House and Senate's financial reform bills will be merged and signed by the Fourth of July.

Senate Banking Committee Chairman Chris Dodd (D-Conn.), who shepherded the financial bill through the upper chamber, has said it would have been too daunting to take on Fannie and Freddie in the already sweeping legislation.

Sen. Mark Warner (D-Va.), a key member of the Banking panel, said last month that Democrats will take on Fannie and Freddie reform next year, after the midterm elections.

But Geithner's comments suggested that could happen sooner, though the secretary did not specify if Congress or the White House would first tackle the reform effort right after work is completed on the financial bill.

Geithner said that action could soon happen on Fannie and Freddie because Democrats and Republicans both want to reform the ailing entities.

"We've had a very careful process in place now for the last nine months to look at options, alternatives. And again, I think we should be able to move quite quickly once we get this first stage of reforms in place," he said. "And, again, we're going to be able to deliver that, because again, you see broad support among both Republicans and Democrats for the recognition that we've got to change that basic system of housing finance."

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