August 06, 2013

Obama urges GSE reform in speech

President Obama discussed housing finance reform before an audience in Phoenix yesterday, calling it a path forward to helping America's middle class and a more prosperous economy.

In his speech, the president outlined eliminating mortgage giants Fannie Mae and Freddie Mac and encouraged "a return of private capital, and put the risk and rewards associated with mortgage lending in the hands of private actors, not the taxpayers," as detailed in a White House fact sheet on housing. Obama also said he sees "access to safe and simple mortgage products like the 30-year, fixed-rate mortgage" as an integral part of housing reform. He also pushed for the Senate to confirm Rep. Mel Watt, D-N.C., to head the FHFA to further assist housing finance reform.

The White House's fact sheet on housing reform also addresses leveling the playing field for all financial institutions, including credit unions, so borrowers can work with whatever lender best fits their needs."Community banks and credit unions must be given the same opportunity to compete in any future system to ensure that consumers have the broadest number of options and can work with the lenders that is best for them," the fact sheet stated.

President Obama's speech paves the way for housing finance reform discussions to continue in the fall when Congress comes back into session. Many aspects of housing reform the president outlined are found in S. 1217, the "Housing Finance Reform and Taxpayer Protection Act," introduced by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., earlier this summer. The House has separate housing finance reform legislation, H.R. 2767, the "Protecting American Taxpayers and Homeowners (PATH) Act," introduced by House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and Rep. Scott Garrett, R-N.J., which varies greatly from the Corker-Warner bill.

NAFCU President and CEO B. Dan Berger, in a statement, reiterated the importance of ensuring credit unions "continue to have unfettered access to the secondary mortgage market and attain fair pricing based on the high quality of their loans." Berger said, "Credit unions are safe, responsible lenders and have proven to be a valuable resource to consumers throughout the financial crisis."

NAFCU advocated for these objectives in testimony before a House Financial Services Committee hearing last month on H.R. 2767.

As debate on housing finance reform heats up this fall, NAFCU will continue to work with Congress and the White House to ensure credit unions' needs are met.

Credit unions will be able to air their concerns directly with lawmakers about housing finance reform, regulatory relief and preservation of the credit union tax exemption during NAFCU's Congressional Caucus in Washington Sept. 8-11.