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The Financial Stability Oversight Council is pressing for housing finance reforms that include establishment of national standards for the mortgage servicing market, Treasury Secretary Tim Geithner told lawmakers Thursday.

Geithner chairs the FSOC, which also includes the heads of the FDIC, NCUA, Federal Reserve Board and Office of the Comptroller of the Currency as voting members. He testified before the House Financial Services and Senate Banking committees Thursday on the council's first annual report.

The Treasury secretary said the council is focused on continued strengthening of the U.S. financial system, particularly the largest institutions. It plans to phase in the stricter capital and liquidity standards negotiated with other financial systems over several years to that end, is pursuing housing finance reforms, seeking to strengthen key funding markets and work better with other nations in implementing financial reforms.

In addition to mortgage servicing standards, he said the council's focus on housing finance reforms will include returning private capital to the housing market, strengthening mortgage underwriting and reducing, over time, the role of the government in the housing markets.

"As we proceed with these reforms, we want to make sure that we are encouraging, not undermining, the prospects for broader recovery in the housing market," he testified.

NAFCU includes a similar objective in its own principles submitted to Congress and the administration for reform of the housing finance system.

Specifically, it is urging a careful resolution of the situation with Fannie Mae and Freddie Mac so as not to disrupt the housing market, which remains fragile. It also wants to ensure the continuation of at least two government-sponsored enterprises to facilitate liquidity for credit union mortgage lending.