September 28, 2018

Mnuchin: Taxpayers shouldn't be on the hook for GSEs

NAFCU President and CEO Dan Berger (right) and NAFCU member credit union CEOs meeting with Treasury Secretary Steven Mnuchin (middle).

NAFCU's Carrie Hunt on Thursday attended a sit-down event with Treasury Secretary Steven Mnuchin during which he discussed the state of housing finance reform, including Fannie Mae and Freddie Mac, the economy, trade issues and tax reform.

The event, part of The Hill's special investigative series, included an open interview of Mnuchin conducted by the newspaper's Editor-In-Chief Bob Cusack.

Hunt, NAFCU's executive vice president of government affairs and general counsel, attended the event. During the interview, Mnuchin said he would like to see taxpayers off the hook for any future potential bailout of Fannie Mae and Freddie Mac. However, he doesn't want the Department of Housing and Urban Development (HUD) to take on all the burden of these mortgage giants.

In December, Treasury and the Federal Housing Finance Agency (FHFA) announced a deal to allow the GSEs to reinstate $3 billion in their capital reserves, an action supported by NAFCU. The ability for the GSEs to rebuild their capital buffers is also included in NAFCU's core principles for housing finance reform.

These principles, which should be included in any final reform measures, have been shared with lawmakers and officials in the Trump administration. Throughout last year and this year, NAFCU has engaged with key lawmakers and agency officials – including Mnuchin and Counselor Craig Phillips, FHFA Director Mel Watt, and HUD Secretary Ben Carson – to achieve credit unions' housing finance priorities.

Freddie Mac and Fannie Mae have been under the FHFA's conservatorship since 2008. NAFCU continues to push for housing reform that guarantees credit unions access to the secondary housing market and for fair pricing based on loan quality instead of volume.