Government-Sponsored Enterprise - GSE
Categories: Tax, Company Management
Government-sponsored enterprises (GSEs) are weird things. Forget everything you thought you knew about public vs private spheres. GSEs are considered “quasi-governmental,” which usually means Congress birthed them into the world, but they are privately held, and provide public services.
Some of the most well-known government-sponsored enterprises include Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation), which are meant to encourage homeownership and keep the mortgage industry booming.
There are also lots of farm-related GSEs, like Farmer Mac and the Farm Credit System. There’s also Sallie Mae, which works with student loans.
Make no mistake, GSEs are so big that, if one went the way of the dodo, it would surely send the economy into a slump. And actually...that already kinda happened. The 2008 subprime mortgage crisis nearly sent Fannie Mae and Freddie Mac into a deep, dark spiral.