WASHINGTON—In the wake of an announcement by Federal Housing Finance Agency (FHFA) Director Mark Calabria's that the agency plans to issue a re-proposed rule setting capital requirements for Fannie Mae and Freddie Mac early next year, NAFCU's Brad Thaler has restated the association's call for legislative action on housing finance reform in a letter to lawmakers.
"NAFCU has long advocated for housing finance reform because the current conservatorship of the GSEs is unsustainable; however, certain legislative safeguards should first be adopted to preserve a level playing field for financial institutions of all sizes," wrote Thaler, the association's vice president of legislative affairs.
In the letter, sent to members of the House Financial Services and Senate Banking Committees, Thaler urged Congress to move "swiftly" to protect the ability of small lenders, such as credit unions, to obtain liquidity through mortgage loan sales to the GSEs.
‘Equal Access’ Needed
"Absent legislative guarantees, including that credit unions will continue to enjoy equal access to the secondary mortgage market based on the quality and not quantity of their loans, small lenders may be disadvantaged by the urgent efforts to remove the GSEs from conservatorship," warned Thaler.
NAFCU noted that during its Congressional Caucus, Calabria discussed the agency's rule for GSE capital requirements, stating that he views the rulemaking as a prerequisite before ending the GSEs conservatorship. Calabria also discussed his plan to prohibit the GSEs’ use of volume-based pricing discounts.
NAFCU, commenting on the original proposal, offered its general support and recommended the FHFA allow the GSEs to submit capital restoration plans as allowed under the Housing and Economic Recovery Act – a provision that makes clear Congress envisioned a path to remove the GSEs from conservatorship. The association said it also believes that restoration plans shouldn't be approved until Congress has agreed to codify certain safeguards.