WASHINGTON (5/16/14)--Despite the announcement of six Senate Democrats late last week that they would not support a housing finance reform overhaul drafted by Senate Banking Committee Chair Tim Johnson (D-S.D.) and ranking member Mike Crapo (R-Idaho), the committee approved that bill (S. 1217) by a 13-9 vote Thursday.
Credit Union National Association President/CEO Bill Cheney, following the vote, said, "It's critical that government-sponsored enterprise reform ensures equal and competitive access for credit unions and other small lenders to the housing finance market--and avoids further concentration of the primary and secondary mortgage markets to Wall Street and the largest of lenders.
"This legislation takes significant steps toward accomplishing both. Our thanks to Chairman Tim Johnson and ranking member Mike Crapo for their leadership."
The bill is intended to redesign the nation's housing finance reform system to address problems that caused and resulted from the country's recent mortgage market and economic meltdown.
CUNA worked closely with the committee and its staff to secure changes to the original draft that addressed:
- The bill's regulatory burden on credit unions and community banks;
- Issues to ensure that the housing finance market remains accessible to credit unions and other smaller institutions; and,
- Giving credit unions, and community banks, representation in governance of the new federal entities envisioned under the proposal.
CUNA also advocated for an adopted increase of an assets cap--up to $500 billion from $15 billion--for participation in a mutual securitization company to provide credit unions and smaller lenders access to securitizing their mortgages.
Sam Whitfield, CUNA vice president of legislative affairs, also reiterated CUNA's thanks to the sponsors of the bill for listening to credit unions' concerns, and pledged CUNA's continued work with lawmakers as they make reforms happen.
"The Johnson-Crapo bill is a bipartisan effort with the majority of the committee members behind it, as shown by this vote. This monumental reform legislation takes into consideration the important role small lenders, like credit unions, have in the marketplace. The prospect of full Senate consideration is unknown at this time, but it is widely agreed that S. 1217 will be a good starting place for future legislation," Whitfield added.
The committee summary of the bill describes it as being designed "to protect taxpayers from bearing the cost of a housing downturn; promote stable, liquid and efficient mortgage markets for single-family and multifamily housing; ensure that affordable, 30-year, fixed-rate mortgages continue to be available, and that affordability remains a key consideration; provide equal access for lenders of all sizes to the secondary market; and facilitate broad availability of mortgage credit for all eligible borrowers in all areas and for single-family and multifamily housing types."