Removing Barriers Blog

Focus on GSE Reform
Posted September 10, 2018 by Chandler Schuette

CUNA has been focused on potential changes to the housing finance system, sending two letters on the subject: one to the Administration and Congress, signed by other lending trades and housing groups, and a second to the House Financial Services Committee, which held a hearing entitled “A Failure to Act: How a Decade without GSE Reform Has Once Again Put Taxpayers at Risk.” 

At that hearing, Chairman Hensarling introduced legislation to eliminate Fannie Mae and Freddie Mac and consolidate their secondary market functions under Ginnie Mae, which currently securitizes mortgages guaranteed by the Federal Housing Administration, Veterans Administration, and United States Department of Agriculture. If this sounds familiar, that's because it's remarkably similar to a proposal released back in 2016 by Ed DeMarco, former acting director of the Federal Housing Finance Agency and Michael Bright, who was recently nominated to lead Ginnie Mae.

While prospects for wholesale housing finance reform this Congress are slim, CUNA appreciates Chairman Hensarling's and others' work in this area. As CUNA evaluates his most recent proposal as well as any others that may emerge, we will do so in adherence to our stated credit union principles for housing finance reform, in particular: ensuring equitable access to the secondary market for all lenders, regardless of asset size or charter, protecting credit unions' ability to service the mortgages they originate if they so choose, and guaranteeing the availability of the 30 year fixed-rate prepayable mortgage, which has been a mainstay in our nation's housing market for nearly a century.