U.S. Lawmakers Reach Deal on Fannie, Freddie Bill (Update1)


By Brian Faler


July 22 (Bloomberg) -- U.S. lawmakers reached agreement on a rescue plan for Fannie Mae and Freddie Mac that the House may vote on tomorrow, Representative Barney Frank said.


Under a modified version of proposals made by the Bush administration, the Treasury Department would gain authority to inject capital into the two largest U.S. mortgage finance companies, through loans and equity investments.


The Treasury would be barred from providing aid that would cause a breach in the federal debt ceiling under the agreement, a constraint aimed at limiting any taxpayer losses. The plan would give Treasury Secretary Henry Paulson power to restrict the companies' ability to pay dividends and require regulatory approval of the salaries of top executives.


``The package we have got is fully acceptable to Treasury,'' along with lawmakers in the Senate, said Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee. ``Nobody is for everything that's in it or got everything in it he wanted, but we negotiated a lot with the Treasury and the Senate.''