Goldman Looks to Buy Fannie Tax Credits

The Wall Street Journal reports:

Goldman Sachs Group Inc. is in talks to buy millions of dollars of tax credits from government-controlled mortgage giant Fannie Mae, but the potential deal is running into opposition from the U.S. Treasury, which could block the deal.

A sale would bring some needed financial respite to Fannie Mae. But the administration is leery about approving a deal that would help Goldman reduce its tax bill, given the animus held by many lawmakers toward big Wall Street firms in general and Goldman in particular.

The Obama administration is looking at the deal with a critical eye and could block it. Goldman, meanwhile, is hopeful it could win approval this week.

"Treasury is reviewing and will not let it proceed unless it is clearly in the taxpayers' interest," spokesman Andrew Williams said.

Fannie Mae and its regulator, the Federal Housing Finance Agency, declined to comment.

"Fannie Mae is owned and controlled by the federal government," said Goldman Sachs spokesman Michael DuVally, who wouldn't confirm the company was in talks with Fannie about the credits. "The only basis on which approval for any transaction would be given would be if it was clearly in the taxpayers' best interest."

Great moments in big, activist government.