Professor David Reiss's op-ed article, "Fannie Mae and Freddie Mac: Time to Avert a Bail Out," was published in The National Law Journal on January 29. 2007. In the article, he discusses, based on recent reports of earnings losses and problems with internal controls, the possibility that Fannie Mae and Freddie Mac could become insolvent, leaving taxpayers to foot the bill. Proposed legislation to reform the regulation of the two companies seems inadequate. Professor Reiss calls on the Federal Reserve to stop granting the companies he privileges that only enable them to dig themselves further into debt. As he wrote, the consequences if the Federal Reserve fails to act are dire indeed: "Many financial crises have their Cassandras, vainly attempting to warn a heedless public of impending ruin" The Savings & Loan fiasco of the 1980s as well as the more recent Internet bust come to mind. The magnitude of the crisis posed by the more than $1.5 trillion of outstanding Fannie and Freddie debt could easily dwarf those earlier ones."
Professor Reiss, who directs the Community Development Clinic, concentrates his study and practice in real estate issues and community development in the not-for-profit, government and community sectors.
Read The National Law Journal op-ed. (PDF)
Read more about Professor Reiss.
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