TVA and Government-Sponsored Enterprises

TVA is commonly compared with government-sponsored enterprises, or GSEs.  However, TVA is different from GSEs in several important ways. It is true that TVA and many GSEs, including Freddie Mac and Fannie Mae, were established by acts of Congress, but TVA is wholly owned by the federal government and does not issue stock.  In general, the GSEs were originally chartered or sponsored by the government but are now owned by private investors.  Several other differences are summarized below.

	TVA	Fannie Mae and Freddie Mac
Federal Charter	1933	1938 (FNMA) 1970 (FHLMC)
Ownership	Federal	Shareholder-owned
Financial objective	Profit-neutral	For profit
Primary revenue source	Electricity sales	Mortgages
Directors appointed by the President	9 of 9 (part-time)	5 of 18 (part-time)
Real Property Owned by the U.S.	Yes	No
Finances Included in Federal Budget	Yes	No
Federal Guarantee of Debt Obligations	No	No
Credit Ratings (senior unsecured)	AAA/Aaa	AAA/Aaa
State and local income tax exemption	Yes	No

 

*The Consolidated Appropriations Act, 2005, among other things, changed TVA's Board of Directors from a full-time, three-member Board to a part-time, 9-member Board.