Goldman Sachs wants to buy millions in otherwise virtually worthless tax credits from Fannie Mae, but the mega-bank is so politically toxic right now that the Obama administration is considering blocking the deal, the Wall Street Journal reports. “Treasury is reviewing and will not let it proceed unless it is clearly in the taxpayers’ interest,” a department spokesman said.
Fannie picked up the tax credits for financing low-income housing, but because Fannie isn’t currently profitable, they’ve been dead weight on its balance sheet. Some believe Goldman wants to pick up as much as $1 billion worth. But it’s unknown how much Goldman’s willing to pay; if the deal seems too sweet, it could stoke criticisms that the government has given Goldman preferential treatment, allowing them to recover and profit handsomely on the taxpayers’ dime.