WASHINGTON (3/13/14)--The Credit Union National Association has identified key areas it will scrutinize in an anticipated housing finance reform bill announced yesterday and expected to be unveiled this week or early next week.
An agreement to move ahead with the bill, which has bipartisan support in the Senate and a strongly positive reaction from stakeholders, was announced Tuesday by Senate Banking Committee Chairman Tim Johnson (D-S.D.) and the committee's top Republican member, Sen. Mike Crapo (Idaho).
CUNA Senior Vice President of Legislative Affairs Ryan Donovan said CUNA is keen to analyze such areas as:
Whether there are provisions in place to assure a smooth transition from the current system based on government sponsorship to a private-market approach;
Whether there is an appropriate government guarantee, paid for by borrowers, that would assure the continued availability of essential 30-year, fixed-rate mortgage; and,
Whether the secondary market must be open to all lenders on an equitable basis.
CUNA also will be scrutinizing whether the proposed underwriting standards and private capital requirements are not so strict as to exclude qualified borrowers from access to mortgage credit.
The bill is expected to wind down government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and replace them with a new mortgage guarantor, the Federal Mortgage Insurance Corporation (FMIC).
The winding down of Fannie and Freddie, and the Federal Housing Finance Agency, would be accomplished within five years of the bill's potential passage. GSE assets would be sold off, and their charters would be revoked once the FMIC is established.
"As CUNA stated when the senators announced their accord yesterday, we look forward to reviewing the legislative text when it is made available and we are hopeful this will be a bill that credit unions can strongly support," Donovan said Wednesday.
He added that with the broad early support surrounding this recent announcement about GSE reform parties can be hopeful that good public policy will be the result.
"Credit unions and banks--primarily smaller banks--are on the same page on this. When that happens--even on a complicated issue like this--good public policy tends to be produced," he said.