The most certain thing about the massive housing bill passed by the House today is that it will be revisited. The authority given the Treasury to backstop Fannie Mae and Freddie Mac expires in 18 months. Tom Stanton who wrote a book in 1991 with the title “State of Risk: Will Government-Sponsored Enterprises Be the Next Financial Crisis?” says the regulatory framework for the GSEs needs to be as strong as it is for commercial banks. Under this bill, it’s not.

In fact, there is a need to massively overhaul the entire financial regulatory system. Treasury Secretary Henry Paulson has made some recommendations and hearings have begun, but this process will likely take years.

Of course, if lawmakers were really on top of the situation, and had reformed Fannie and Freddie years ago, we may have avoided the need to pass this “emergency” legislation.