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NAFCU’s Housing Finance Working Group held its first quarterly meeting of 2023 where they discussed the association’s advocacy with the Federal Housing Finance Agency (FHFA) and the latest regulatory updates from the agency.

The group highlighted the FHFA’s request for information (RFI) to understand the opportunities and potential risks associated with Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs), issuing single-family social bonds under the ESG frameworks. They also talked about the agency’s proposed rule to amend certain Enterprise Regulatory Capital Framework provisions for GSEs. The proposed rule modifies provisions related to guarantees on commingled securities, multifamily mortgage exposures secured by properties with government subsidies, derivatives and cleared transactions, and credit scores.

In addition, the group discussed the FHFA’s work to update the enterprises’ credit score requirements. The agency recently announced it is seeking public input on the implementation of the new requirements, which mandate that credit unions that sell to the GSEs replace the classic FICO credit score model with the FICO 10T and the VantageScore 4.0. There will also be a transition from requiring three credit reports to two. Of note, NAFCU Vice President of Regulatory Affairs Ann Petros delivered remarks at an FHFA public session, urging for alternative credit scoring models that more accurately capture creditworthy borrowers and offer them access to affordable credit.

The CFPB is currently seeking comment on the mortgage loan originator rule under Regulation Z, specifically its impact on small entities. The working group reviewed the request for comment; NAFCU will submit feedback to the bureau.

NAFCU’s Housing Finance Working Group will next meet June 29. The association will continue to advocate with the FHFA for policies that promote sustainable and equitable access to affordable housing and ensure the credit union industry’s best interests in the housing finance system.