January 31, 2018

Hunt to Senate Banking: Maintain CUs' secondary mortgage market access

NAFCU's Carrie Hunt, in a letter yesterday to the Senate Banking Committee, urged committee members to ensure credit unions' access to the secondary mortgage market in any housing finance reform legislation it considers.

Hunt, NAFCU's executive vice president of government affairs and general counsel, was writing in response to the Federal Housing Finance Agency's (FHFA) recently released objectives to reform the housing finance system. The objectives include a recommendation for a single government-guaranteed mortgage-backed security, echoing a key part of NAFCU's core principles for housing finance reform.

In the letter sent to Senate Banking Chairman Mike Crapo, R-Idaho, and Ranking Member Sherrod Brown, D-Ohio, Hunt outlines other reform efforts NAFCU supports, including:

  • creating a level playing field in terms of fair pricing based on loan quality instead of loan volume;
  • a legislative solution to the government-sponsored enterprises' conservatorships;
  • continuing to implement the Common Securitization Platform and Single Security; and
  • reducing systemic risk and protecting taxpayers through credit risk transfer transactions.

Bloomberg yesterday released a draft of housing finance reform legislation being worked on by Senate Banking members Bob Corker, R-Tenn., and Mark Warner, D-Va. The proposed legislation outlines new roles for Ginnie Mae and the FHFA, while establishing conditions for transition from a GSE model, to one with multiple guarantors and guaranteed access for small lenders.

Bloomberg reports that discussions on this draft bill are ongoing and not final. NAFCU is reviewing the draft bill and remains engaged with Corker and Warner.

On Monday, NAFCU met with the Treasury Department to discuss housing finance reform. During the meeting, NAFCU shared its housing finance reform principles, which it believes will ensure the safety and soundness of the credit union system and should be included in whatever reform option is ultimately adopted.

NAFCU will continue to monitor congressional efforts currently underway on housing finance reform and advocate for credit unions' unfettered access to the secondary mortgage market.