January 08, 2014

NAFCU to Congress: Don't use g-fees for unemployment

Jan. 9, 2014 – NAFCU and eight other trade groups on Wednesday jointly urged the leaders of Congress not to use the government-sponsored enterprises' credit risk guarantee fees, or g-fees, to extend emergency unemployment compensation benefits under S. 1845.

In a letter, the financial institution and housing finance trades said g-fees should only be used to manage the credit risk of Fannie Mae and Freddie Mac. "Increasing g-fees for other purposes effectively taxes potential homebuyers and consumers wishing to refinance their mortgages. G-fee increases unrelated to housing could also act to hinder the necessary reforms required of the housing finance system," the letter said.

Other signers included the American Bankers Association, the American Land Title Association, Community Mortgage Lenders of American, CUNA, the Housing Policy Council, the Mortgage Bankers Association, the National Association of Home Builders and the National Association of Realtors.

The signers noted that although the real estate market has improved since the financial crisis, using g-fees in this way is still a hindrance to consumers looking to buy or refinance their homes. They also pointed out that increasing g-fees will negatively affect legislators' progress in creating housing finance reform and ending the conservatorships of Fannie and Freddie.

NAFCU signed another joint trade letter on the use of g-fees to cover government spending in November, citing previous instances of lawmakers using or suggesting the use of g-fees to fund measures such as an extension of payroll tax relief or coastal restoration projects.