Johanns: Taxpayers shouldn’t be ‘holding the bag’ for risky lenders

Sen. Mike Johanns (R-Neb.) said Monday that he would support legislation ending taxpayer-funded bailouts for lenders.

“Our nation’s housing crisis saw foreclosure rates hit all-time highs and taxpayers were required to bail out lenders Fannie Mae and Freddie Mac to the tune of $180 billion dollars,” Johanns said. “A lot has changed since then, but the fundamentals that left Americans holding the bag for other people’s risky gambles have not.”

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Leaders of the Senate Banking, Housing and Urban Affairs Committee introduced legislation that aims to wind down Fannie Mae and Freddie Mac in five years, eventually eliminating the government-controlled mortgage giants.

Johanns, who has drafted similar legislation, said he was still reviewing the new bill and hadn’t endorsed it yet, but he supports the idea of ending taxpayer bailouts.

“I’m continuing to review this legislation, but am pleased progress is being made and eager to continue working with my colleagues to get this important reform done,” Johanns said.

The government took control of Fannie and Freddie during the economic crisis in 2008. Nearly $188 billion of taxpayer money was borrowed to secure housing loans and all of it has been paid back to Treasury.