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Nov. 14, 2013 – NAFCU and other trades on Wednesday jointly urged House and Senate budget committee leaders not to use Fannie Mae and Freddie Mac credit risk guarantee fees, or g-fees, as a source of revenue in the federal budget, warning that would effectively tax consumers for buying and refinancing homes.

The letter was sent as the lawmakers work to reconcile the Senate and House versions of the fiscal 2014 budget resolution. Sent to Sen. Patty Murray, D-Wash., and Rep. Paul Ryan, R-Wis., the letter was signed by nine financial industry trades in all, among them NAFCU, CUNA, the National Association of Realtors, the Mortgage Bankers Association, the Community Mortgage Lenders of America and the American Bankers Association.

The signers referenced previous instances of lawmakers using, or suggesting the use of, g-fees to fund measures such as an extension of payroll tax relief or coastal restoration projects. "In each of these instances," the letter says, "our members let Congress know that housing cannot, and must not, be used as the nation's ‘piggybank.'"

"G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans," the letter continued. "Increasing g-fees for other purposes effectively taxes potential homebuyers and homeowners looking to refinance their mortgages. The Senate spoke clearly on this issue when it unanimously adopted a bipartisan amendment, offered by Banking Committee Chairman Tim Johnson and Ranking Member Mike Crapo, that creates a budget point of order against the use of g-fees to pay for unrelated spending."

The signers concluded that although the real estate market has improved since the financial crisis, using g-fees in this way is still a hindrance to consumers looking to buy or refinance their homes. They also pointed out that increasing g-fees will negatively affect legislators' progress in creating housing finance reform and ending the conservatorship of Fannie and Freddie.