March 11, 2014

Johnson, Crapo have GSE agreement

March 12, 2014 – For now, credit unions' access to the secondary mortgage market would be preserved under a draft housing finance reform measure announced by Senate Banking Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho, during a briefing attended by NAFCU lobbyists Tuesday.

Johnson said the draft, which includes proposals from several committee members, has the support of nearly everyone on the panel. The committee will be working from S.1217, the Corker-Warner bill, as the base text and will generally maintain its overall architecture, the senators said.

NAFCU President and CEO Dan Berger said the association looks forward to working with lawmakers as reform moves forward. "NAFCU appreciates the continued work of Chairman Johnson and Ranking Member Crapo as they tackle the complex issue of housing finance reform in a bipartisan way," Berger said Tuesday. "We are encouraged that the announcement today recognizes that credit union access to the secondary market is vital for homeownership and a healthy housing finance system."

NAFCU will carefully review legislative language when released to ensure that the draft would preserve secondary mortgage market access for small lenders, including credit unions.

Some of the key provisions of the plan:

  • Ensure that affordable, 30-year, fixed-rate, prepayable mortgages continue to be available, and that affordability remains an important consideration.
  • Provide equal access for lenders of all sizes to the secondary market.
  • Facilitate broad availability of mortgage credit for all eligible borrowers in all areas and for single family and multifamily housing types.

NAFCU is working closely with Congress to ensure that any final reform measure includes government-guaranteed access for credit unions to the secondary mortgage market and loan pricing based on loan quality, not quantity. NAFCU lobbyists noted that while the release of the measure is a big step, there are many issues still to be resolved before any GSE reform is finalized by both chambers of Congress.