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Fannie, Freddie Cannot Exist in Current Form: Frank

Rep. Barney Frank (D-Ma.), chairman of the House Financial Services Committee, said Friday that Fannie Mae and Freddie Mac should be eliminated as they stand now.

"This committee will be recommending abolishing Fannie Mae and Freddie Mac in their current form and coming up with a whole new system of housing finance, that's the approach rather than the piecemeal one," Frank said.

Frank made his comments during the committee's hearings on executive compensation.

A statement to CNBC.com from a senior congressional staff person said that Frank has said in the past that the current structure of Fannie and Freddie cannot exist and that in Frank's words, 'we cannot go back to the private entity with public responsibilities.'

The White House has said it plans to release a proposal for what to do with the two firms later this year.

The two mortgage finance companies are controlled by the government after it was forced to take them over to avoid their collapse in the fall of 2008.

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