NAFCU's Fred Becker, in a letter Monday, urged
the Senate Banking Committee to ensure CUs'
continued, uninterrupted access to the secondary
March 19, 2013 – NAFCU President and CEO Fred Becker advanced the association’s core principles for housing finance reform in a letter sent ahead of today’s Senate Banking Committee hearing, “Bipartisan Solutions for Housing Finance Reform?”
Writing to panel Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho, Becker reiterated the association’s call to preserve credit unions’ access to the secondary mortgage market. Not only should that access be uninterrupted, he said, but there should be at least two government-sponsored enterprises plus explicit government guarantees on principal and interest payments on mortgage-backed securities.
Becker also recommended that the GSEs be regulated by the Federal Housing Finance Agency and be required to meet strong capital standards. A board of advisors made up of representatives from the mortgage lending industry, including credit unions, should be formed to advise the FHFA regarding GSEs, he said.
The Senate Banking Committee begins an executive session at 10 a.m. today to vote on nominations, including that of Richard Cordray to a five-year term as CFPB director (see story). It will then move on to its hearing on housing finance reform. Hearing witnesses include Mel Martinez, co-chair, Bipartisan Policy Center’s Housing Commission; Peter Wallison, Arthur F. Burns fellow in financial policy studies, American Enterprise Institute; and Janneke Ratcliffe, senior fellow, Center for American Progress.
The House Financial Services Committee will also look at housing finance in its own hearing, “Sustainable Housing Finance: An Update from the Federal Housing Finance Administration on the GSE conservatorships.” FHFA Acting Director Ed DeMarco is scheduled to testify.
NAFCU is urging lawmakers in both the House and the Senate to ensure any housing finance reform efforts provide credit unions with continued access to the secondary market and liquidity for mortgage loans.
On Sunday, The New York Times reported that a group of state attorneys general called on President Obama to remove DeMarco because of his refusal to support a policy requiring lenders to reduce the principal on underwater mortgages. NAFCU has urged against principal reduction due to its potential costs to credit unions and their members (see story).