In a recent interview with Scotsman’s Guide, Investors Unite Executive Director Tim Pagliara emphasized that regardless of the path policymakers choose to pursue for GSE reform, they must reverse the net worth sweep and uphold the rule of law.
When asked about privatization proposals, Pagliara said the following:
“It can go any number of ways. The proponents of the sweep want to characterize investors as having a particular agenda as it relates to Fannie and Freddie. In my experience with Investors Unite, that is not the case. All that we have ever advocated for is that we want our rights to be respected in whatever scenario plays out. Shareholders should be treated according to the law, just like shareholders in any publicly traded company. There are a lot of different paths that could emerge under the term of “privatization” that would uphold shareholder rights.”
He also highlighted the growing threat to taxpayers posed by the ongoing Net Worth Sweep:
“The Sweep has always been dubious from a legal and constitutional standpoint. Now, it is actively and unnecessarily endangering taxpayers. It all comes down to respecting the rule of law. Virtually any discussion about privatization where you are trying to attract new capital, that is going to be real important to [potential investors] because they are not going to put new capital in, unless the rule of law is respected first.”
You can read the entire interview here.
Photo by NCinDC