Fannie Mae will seek billions in cash from U.S. taxpayers after the government-managed mortgage finance giant reported a net loss of $6.5 billion in its most recent fiscal quarter.
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The company, which has been under government conservatorship since the 2008 financial crisis, attributed its losses to the recent change to U.S. corporate tax law, which lowered the corporate tax rate to 21% and made deferred tax assets on its books less valuable. Fannie Mae said the Federal Housing Finance Agency, which oversees its operations, would pursue $3.7 billion in funding from taxpayers to cover the deficit.
Jeb Hensarling (R-Texas) of the House Financial Services Committee referred to Fannie Mae’s proposed taxpayer infusion as a “bailout request.”
“Americans deserve better,” he said in a statement obtained by the Wall Street Journal. “That’s why Congress can and should enact comprehensive housing finance reform this year to create a sustainable housing system.”
Fannie Mae shares fell nearly 4% in trading Thursday. Freddie Mac, which is also under an ongoing government conservatorship, fell about 4% as well. Under the bailout’s terms, both companies must provide any profits they earn to the U.S. government.
Fannie Mae’s request would mark the company’s first cash infusion from public funds in six years. The company has sent $166.4 billion to the U.S. Treasury and will have received $199.8 billion in total cash after the infusion, according to the Journal.