April 29, 2014

Senate Banking GSE mark-up delayed

April 30, 2014 – After making brief opening remarks yesterday, Senate Banking Committee Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho, delayed markup of S. 1217, the housing finance reform bill, to give members more time review the legislation.

NAFCU lobbyists report that the "recess" of the markup could postpone any further action until next week.

"As all of the Members already know, there continue to be important discussions to build a larger coalition supporting the bill," Johnson said during his opening statement. "While we have the votes to report the bill out today, Members of the Committee have asked for a brief delay to try to work out additional issues prior to a final vote."

NAFCU lobbyists, after reviewing details of the manager's amendment that came out this past weekend containing changes to the Johnson-Crapo discussion draft, said the proposed changes would be a positive step toward addressing some credit union concerns, but other issues remain.

The association 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.

The manager's amendment would, among other things:

  • further clarify NCUA's role under the new system for providing input as the functional 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 affiliation between 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.