Fact Check: Did McCain join, or lead on Fannie-Freddie reform?

Fact Check: Did McCain join, or lead on Fannie-Freddie reform?

The Statement
Democratic presidential nominee Sen. Barack Obama said at the Oct. 7 presidential debate in Nashville, Tennessee, "With respect to Fannie Mae, what Sen. McCain didn't mention is the fact that this bill that he talked about wasn't his own bill. He jumped on it a year after it had been introduced and
it never got passed."

Get the facts!

The Facts
Since the recent financial meltdown, McCain has repeatedly said on the campaign trail that he warned his fellow lawmakers about a potential crisis with the government-regulated mortgage firms Fannie Mae and Freddie Mac. He's referring to a May 2006 speech he gave on the floor of the Senate in support of a plan he co-sponsored — the Federal Housing Enterprise Regulatory Act of 2005.

In the speech, he cited a federal report, saying that "Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets." He also noted a $3.8 million fine Freddie Mac had recently paid to the Federal Elections Commission over problems with disclosure of its political lobbying. "These are entities that have demonstrated over and over again that they are deeply in need of reform," McCain said in the speech. He urged senators to support changing how the institutions were overseen by the government.

Sen. Chuck Hagel, R-Nebraska, sponsored the bill, which was introduced in January 2005. The legislation, which never became law, would have moved oversight of Fannie and Freddie from the department of Housing and Urban Development to an independent Federal Housing Enterprise Regulatory Agency.

The Verdict: True. McCain's warning came more than a year after legislation was introduced. He was not the sponsor and the bill failed to pass.

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We all know that the Republicans controlled the Senate and Congress up until November 2006. So if this bill didn't pass; we know why. This bill would have moved oversight from government to an independent agency. Sounds like even more deregulation in an industry that needs more regulation to control the corruption on Wall Street.