WASHINGTON (11/14/13)--Credit risk guarantee fees charged by government-sponsored enterprises Fannie Mae and Freddie Mac must not be used as a potential revenue source during budget reconciliation talks, the Credit Union National Association said in a Wednesday letter to members of the U.S. Congress.
The letter was sent as a statement for the record of a Wednesday House-Senate conference committee meeting on S.Con.Res.8. That bill would revise fiscal 2013 budget levels, set the congressional budget for fiscal 2014, and set budgetary levels for the 2015-2023 fiscal years.
Members of Congress are currently working to reconcile Senate and House versions of the Fiscal Year 2014 Budget Resolution.
In a letter to the two legislators, CUNA and others noted that guarantee fees (g-fees) are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans. Increasing guarantee fees for other purposes effectively taxes potential homebuyers and consumers wishing to refinance their mortgages, the letter added.
"Though we are seeing signs of improvement in the real estate sector, we must avoid taking any steps that could keep housing consumers on the sidelines and hinder that recovery. Moreover, adopting another g-fee increase will further tie policymakers' hands just as Congress is beginning to consider broader housing finance reform legislation and a resolution to the conservatorship of Fannie Mae and Freddie Mac," the letter said.
The letter was cosigned by the American Bankers Association, American Land Title Association, Community Mortgage Lenders of America, Housing Policy Council, Mortgage Bankers Association, National Association of Federal Credit Unions, National Association of Home Builders and the National Association of REALTORS®.
For the full letter, use the resource link.
Other hearings held on Wednesday included:
A Joint Economic Committee hearing on the current economic outlook; and
A House Financial Services monetary policy subcommittee hearing on international central bank models.