Here’s How CUs Are Responding to Senate Hearing on Housing Finance Reform

WASHINGTON—Credit unions have responded generally positively to comments made during a Senate Banking Committee hearing this week on housing finance reform.

Senate Heaering

Steven Mnuchin

Both CUNA and NAFCU sent letters to the committee with a number of demands, including ensuring CU access to the secondary market, as reported.

Repeating a point NAFCU made in its letter, CEO Dan Berger stressed, “First and foremost, a legislative solution is necessary and crucial to ensuring credit unions receive guaranteed access to the secondary mortgage market and fair pricing for their paper, and we appreciate the Senate Banking Committee’s commitment to these key issues. Also, the committee’s focus on allowing Fannie Mae and Freddie Mac to rebuild their private capital reserves is a positive development as private capital can be used to shield American taxpayers from risk, place the GSEs on solid financial footing, and help stabilize them for the long-term.” 

Secretaries Testify

Treasury Secretary Steven Mnuchin, Department of Housing and Urban Development (HUD) Secretary Ben Carson, and Federal Housing Finance Agency Director Mark Calabria–who appeared at NAFCU’s Congressional Caucus just a day after testifying—appeared before the committee. The Trump administration last week released plans from Treasury and HUD to reform the housing finance system.

During opening remarks, Senate Banking Committee Chairman Mike Crapo (R-ID) stressed the importance of a level playing field and Ranking Member Sherrod Brown (D-OH) said reforms need to focus on increasing services for underserved borrowers. 

Mnuchin provided the committee with an overview of the Treasury's plan and said the department prefers to work with Congress to enact comprehensive housing finance reform. He also discussed the issue of providing a government backing for 30-year, fixed-rate mortgages.

Mnuchin Offers Protection

When asked how community banks and credit unions would be affected by the proposed reforms, Mnuchin said Treasury "will absolutely make sure they did not fare worse. We want them to be treated fairly; that is a very big part of any future plan.” 

Carson added that the institutions are key to housing finance reform, noting "their ability particularly to provide education to people about housing financial management is essential.”

Calabria also said FHFA would work to eliminate volume discounts for large lenders to ensure equal pricing.

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Copyright Year: 2019
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