WASHINGTON (8/9/11)--Credit rating agency Standard & Poor's on Monday downgraded the credit rating for government-sponsored enterprises Fannie Mae and Freddie Mac, as well as the ratings applied to four National Credit Union Administration-guaranteed debt issues from the corporates. The rating agency specifically downgraded debt issued by two corporate credit unions under the Temporary Corporate Credit Union Share Guarantee Program (TCCUSGP) to AA+ from AAA. S&P said that the downgrades on the TCCUSGP issues "reflect their direct credit support from the U.S. Treasury for timely and ultimate repayment." S&P also cut the U.S. government's credit rating to AA+ Friday, saying that the recently approved deficit reduction plan didn't do enough to re-insert stability in the country's debt situation. Government debts and securities were downgraded. S&P said that the GSE downgrade was tied to Fannie and Freddie’s "direct reliance" on the U.S. government. The GSEs have been held under U.S. government conservatorship since 2008. Another credit rating agency, Fitch Inc., late last month said that Fannie Mae and Freddie Mac will require continued capital injections from the Treasury Department to avoid being unwound. Credit Union National Association (CUNA) Chief Economist Bill Hampel said that the downgrade on U.S. Treasury securities has had no impact on Treasury interest rates, "and as long as that is the case, there would appear to be little if any impact on Fannie, Freddie or other agency debt." Finance industry representatives recently urged the government to transition away from Fannie Mae and Freddie Mac during a Senate subcommittee hearing, but legislation to create a new mortgage finance system is unlikely. However, legislation that would require the director of the Federal Housing Finance Agency to determine which valuable assets held by the GSEs are critical to their mission and to force them to sell or dispose of non-critical assets, has been discussed. That bill, known as the Market Transparency and Taxpayer Protection Act (H.R. 2440), was introduced by Rep. Robert Hurt (R-Va.) and passed out of the House Financial Services subcommittee on capital markets and government GSEs via a voice vote early last month. The subcommittee during that hearing also voted to approve the Fannie Mae and Freddie Mac Transparency Act (H.R. 463); The Fannie Mae and Freddie Mac Taxpayer Payback Act (H.R. 2436); The Housing Trust Fund Elimination Act (H.R. 2441); Cap the GSE Bailout Act (H.R. 2462); Eliminate the GSE Charter During Receivership (H.R. 2439); and The GSE Legal Fee Reduction Act (H.R. 2428). Fannie Mae late last week reported $2.9 billion in losses during the recently ended second quarter of 2011. For prior coverage of S&P’s recent rate cut, use the resource link.