April 28, 2014

Johnson-Crapo housing draft changes eyed

April 28, 2014 – NAFCU lobbyists said proposed changes in a "manager's amendment" being eyed for the draft Johnson-Crapo housing finance reform bill would be a positive step toward addressing credit union concerns, but other issues remain. NAFCU will seek further improvements.

The manager's amendment, reviewed by NAFCU lobbyists over the weekend, addresses some of theissues raised by NAFCU about the bill. The measure, from Senate Banking Committee Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho, is slated for mark-up tomorrow by the full committee.. The amendment would, among other things:

  • further clarify NCUA's role under the new systemfor providing input as thefunctional regulator of credit unions;
  • clarify credit unions would be able to invest in new securities offered through the new Federal Mortgage Insurance Corporation as they can do now through Fannie Mae and Freddie Mac;
  • prohibit any affiliationbetween guarantors and originators of single-family mortgages;
  • seek to ease access to the mutual for small institutions, including through establishment of a streamlined process for lenders already approved by Fannie and Freddie.

"These draft changes are a step in the right direction, but we have also raised additional concerns that we would like to see addressed in the process," said NAFCU Vice President of Legislative Affairs Brad Thaler.

NAFCU is pressing to ensure small institutions equal, competitive access to the secondary mortgage market in any future housing finance system. It is also concerned about the cost of the proposed reforms and the uncertainty posed by moving toward a new system. The association has made several specific recommendations with other financial trade organizations to improve the discussion draft.