Treasury Department officials slammed the door Monday on the possibility that the bailed-out mortgage businesses Fannie Mae and Freddie Mac could return to the private sector, aiming to quash rumors that the Obama administration was considering such a move.
"The right answer is not to 'recap and release' as some say," Treasury Secretary Jack Lew said Monday morning on CNBC.
"Recap and release" refers to the idea that the Treasury would allow the two businesses, bailed out in 2008, to retain earnings to build up capital and then to leave the government's custody.
Some investors in the two companies have pushed for such a maneuver in recent years as legislation to shutter Fannie and Freddie has stalled and their income has picked up. The investors interested in reprivatizing the companies include activist hedge funds.