As ordered reported by the House Committee on Oversight and Government Reform on March 28, 2017
H.R. 1694 would amend the Freedom of Information Act (FOIA) to make its provisions apply to Fannie Mae and Freddie Mac when the two entities are in federal conservatorship or receivership. Under current law, Fannie Mae and Freddie Mac (the entities) are not subject to FOIA because they are not federal agencies. Under the bill, the two entities would be directed to accept and process FOIA requests from the public and to release information to satisfy those requests as long as they are in federal conservatorship.
Based on information provided by the two entities, the Federal Housing Finance Agency (FHFA), and annual FOIA costs incurred by other federal agencies, CBO estimates that administrative costs for Fannie Mae, Freddie Mac, and FHFA would increase under the bill. All of the net costs would be borne by Fannie Mae and Freddie Mac because FHFA would assess fees on the two entities to cover its costs. CBO estimates that enacting the legislation would increase direct spending by $10 million over the 2018-2027 period; therefore, pay-as-you go procedures apply. Enacting the bill would not affect revenues.
Fannie Mae’s and Freddie Mac’s administrative costs would increase because each entity would need to hire staff to review FOIA requests, gather relevant information, evaluate the information to determine if it is exempt from disclosure under FOIA, and release the nonexempt information to satisfy such requests. Each entity also would need to expand data processing tools and systems to electronically search and compile relevant data and documents. Finally, the entities would need to hire staff to handle appeals that arise when information is withheld because the entity considers it to be exempt from disclosure under FOIA.
Based on an analysis of information provided by the entities and FHFA, and the costs incurred by federal agencies to comply with FOIA, CBO estimates that administrative costs would increase by $40 million in 2018 because Fannie Mae and Freddie Mac likely would employ outside firms to accept, evaluate, and respond to FOIA requests while simultaneously building internal capacity to perform that work with their own employees. Once the organization’s internal FOIA offices are operating, administrative costs would total about $30 million annually, CBO estimates. Those estimates include additional costs for FHFA to review requests received by Fannie Mae and Freddie Mac that include information FHFA has shared with them in its capacity as their regulator. In total, CBO estimates that over the next 10 years Fannie Mae’s and Freddie Mac’s administrative costs would increase by $310 million.
Administrative costs for Fannie Mae, Freddie Mac, and FHFA in recent years have totaled about $5 billion annually. Under the bill, CBO expects that the entities would cover the increase in costs by reducing other administrative expenses (by about $20 million per year), increasing fees charged for providing loan guarantees (by about $10 million a year), and reducing the portion of fees that would be available to cover the costs of its loan guarantees. On that basis, CBO estimates that enacting the bill would increase Fannie Mae’s and Freddie Mac’s subsidy costs by about $10 million over the 2018-2027 period.
CBO estimates that enacting H.R. 1694 would not increase net direct spending or on-budget deficits by more than $5 billion in any of the four consecutive 10-year periods beginning in 2028.
H.R. 1694 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, or tribal governments.