FOR IMMEDIATE RELEASE
Washington (October 19, 2017) – The National Association of Federally-Insured Credit Unions (NAFCU) and the Independent Community Bankers of America® (ICBA) today wrote to Federal Housing Finance Agency Director Mel Watt urging the agency to allow the government-sponsored enterprises (GSEs) to rebuild their capital buffers.
NAFCU and ICBA agree that internal reforms are not enough and that the time has come for Congress to act on comprehensive housing finance reform to create a more healthy and sustainable secondary market. However, they urge the FHFA do all within its power to ensure the GSEs–Fannie Mae and Freddie Mac– are able to maintain capital that can provide stability in the event of short-term losses.
“Allowing the GSEs to rebuild their capital buffers to avoid another draw of taxpayer support would maintain investor confidence, which is essential to the safety and soundness of the secondary market, and would prevent any further market disruptions,” NAFCU President and CEO Dan Berger said. “This would ensure the GSEs the continued ability to provide liquidity to credit unions, community banks and other lenders to support a vibrant housing finance system.”
“It is essential that the GSEs maintain a modest capital buffer–perhaps only enough to cover losses in a single quarter–so that they are not forced to draw on the Preferred Stock Purchase Agreement commitments at the expense of taxpayers,” ICBA President and CEO Camden R. Fine said. “Such an occurrence would not only erode investor confidence but would also taint the public’s perception of the housing finance system and the secondary market, putting the future of the housing finance system at risk. This self-inflicted outcome must be avoided.”
About NAFCUThe National Association of Federally-Insured Credit Unions (NAFCU) is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to www.nafcu.org or @NAFCU on Twitter.
About ICBAThe Independent Community Bankers of America®, the nation’s voice for more than 5,700 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit ICBA’s website at www.icba.org.