Removing Barriers Blog

CUNA Witness Testifies Before Senate Banking on Housing Finance Reform
Posted July 20,2017 by CUNA Advocacy

CUNA’s witness, Tim Mislansky – SVP and Chief Lending Officer at Wright-Patt Credit Union, discussed housing finance reform before the Senate Banking Committee.  In addition to his roles at Wright-Patt Credit Union and myCUmortgage, Mr. Mislansky is also the Chair of CUNA’s Housing Subcommittee. 

Today’s hearing was the third housing finance reform hearing the Committee has held, but the first to focus on the perspective of small lenders.  During his opening statement, Mr. Mislansky took the time to highlight a number of points from his written testimony including CUNA’s principles for housing finance reform which you will find below.  Mr. Mislansky stressed the need for credit union access to a functioning, well-regulated secondary market and a system that will accommodate member-demand for long term fixed rate mortgage products. 

A number of the Senators asked the panel to discuss their opinions on volume discounting offered by Fannie Mae and Freddie Mac.  The panel was unanimous that volume pricing gives large lenders an unfair competitive advantage over the smaller lenders represented by today’s witnesses.  

As previously stated, CUNA is encouraged by the reasoned bipartisan debate on housing finance reform that is taking place, and will continue to fight for a system that will ensure credit unions’ access to the secondary market, protect taxpayers from future bailouts and support stability and affordability in the housing market.  As the Committee continues their work, CUNA will continue to push strongly in both the House and Senate to protect the interests of credit unions large and small, rural and urban, during this important debate.  

CUNA’s Principles for Housing Finance Reform 

  1. There must be a completely neutral third party independent of any mortgage originating institution, to ensure that no participant enjoys an unfair advantage and undue influence in the secondary market. 

  1. The secondary market must be open to lenders of all sizes on an equitable basis, with access and pricing independent of lender volume. 

  1. The entities providing secondary market services must be subject to appropriate regulatory and supervisory oversight. 

  1. The new system must be durable, to ensure mortgage loans will continue to be made to qualified borrowers even in troubled economic times. This will require some kind of explicit, catastrophic federal guarantee funded by appropriate fees, with significant private capital in a first-loss position. 

  1. Any new housing finance system should emphasize consumer education and counseling to ensure that borrowers are able to remain in their homes. 

  1. The housing finance system must provide for predictable, affordable payments to qualified borrowers, including the 30-year fixed rate mortgage. 

  1. Conforming loan limits should be reasonable, and take into consideration local real estate prices in higher cost areas. 

  1. Credit unions should have the option to retain or sell the right to service their members’ mortgages, regardless of whether that loan is held in portfolio or sold into the secondary market. 

  1. The transition from the current system must be orderly, to prevent significant disruption to the housing market which would harm homeowners, potential homebuyers, the credit unions who serve them, and the nation’s housing market as a whole.