WASHINGTON—In response to a proposed rule from the Federal Housing Finance Agency’s that would amend the government sponsored enterprises’ (GSEs’) Enterprise Regulatory Capital Framework (ERCF), NAFCU is asking for adjustment of the base risk rate for mortgages originated by credit unions.
The proposed rule would amend the framework by refining the prescribed leverage buffer amount (PLBA) and credit risk transfer (CRT) securitization framework for the GSEs.
“NAFCU strongly supports the continued use of CRT to ensure stability in the housing finance system,” wrote Regulatory Affairs Counsel Aminah Moore. “NAFCU generally supports the proposed rule’s changes to the risk weight for CRT and removing the effectiveness adjustment as proposed in this rule. NAFCU also urges the FHFA to consider an adjustment of the base risk rate for mortgages originated by credit unions.”
In the letter, Moore outlined the CRT and what she said are its many benefits for the GSEs, agreeing with the FHFA’s proposed changes to the ERCF in expanding its use for GSEs. In addition, Moore addressed the CRT’s limitations on capital relief.