Craig Phillips, counselor to the secretary at the U.S. Department of Treasury, advocated for a legislative solution to the ongoing conservatorships of Fannie Mae and Freddie Mac. He said the decision to allow the GSEs to retain a small capital buffer was a litmus test on housing reform. Although he said Treasury didn’t feel that Fannie and Freddie have an immediate capital problem because they have lines of credit, Phillips said there was somewhat of an “optical issue,” which led to the Treasury’s decision to allow the GSEs to retain up to $3 billion in capital in December. Speaking at a Women in Housing and Finance public policy luncheon in Washington, he said, “We think that decreases tension over this point. There was...