With Congress afraid of weakening the housing market, Fannie and Freddie will likely face only modest reforms.
Critics want to force both companies to hold the same amount of capital as banks. But at Fannie and Freddie that could cut profits and limit expansion -- an argument that is likely to prevail.
Fannie's and Freddie's investments, totaling $1.6 trillion, leave them vulnerable to big interest rate moves. Yet Congress is unlikely to cap these investments for fear that it could help push up interest rates.
In an effort to force Fannie and Freddie to hew to their core mission -- making housing affordable to more people -- lawmakers want to rein in their ability to issue new products. They'll likely get their way.