WASHINGTON—The House voted has 261-192 to pass the credit union-supported CBDC Anti-Surveillance State Act (H.R. 5403). The bill—which has a Senate companion—would prohibit the Federal Reserve from issuing a central bank digital currency (CBDC).
The passage of the legislation comes just days after the House has also passed legislation that seeks to create a new legal framework for digital currencies, even though the SEC has said it could create new financial risks, as CUToday.info reported here.
“Credit unions pride themselves on safe, sound, and secure financial services they provide for the 142 million Americans who trust us with their checks and balances. Anything additional handed to the Federal Reserve to oversee could put the entire system at risk and one that as an industry, we aren’t willing to take,” wrote America’s Credit Unions’ President and CEO Jim Nussle in a letter sent ahead of the vote. “America’s Credit Unions urges Congress to swiftly pass this commonsense bill that protects the pockets and personal information of the American people.”
Support for Freddie Mac Product
Separately, the introduction of a Freddie Mac product to purchase closed-end second mortgages as an alternative to cash out refinances is being supported by America’s Credit Unions.
The Federal Housing Finance Agency (FHFA) proposed the new product in April.
“America’s Credit Unions believes the proposal is in the public interest and advances Freddie Mac’s public mission. We wish to stress that it is important consumers use this process thoughtfully and refrain from exposing themselves to delinquency or default by withdrawing the balance of their savings,” wrote America’s Credit Unions’ Amanda Smith.
“We further believe that Freddie Mac should tailor its product to interact smoothly with the underwriting process and be scalable to higher amounts,” she added. “We also recommend Freddie Mac consider the level of credit risk and the role of Loan Level Pricing Adjustments (LLPAs) when designing its final product.”
Additional Support
America’s Credit Unions said it also supports:
- Equal access to the secondary mortgage market for lenders of all sizes, but is concerned that if too many lightly supervised entities and high-volume lenders participate in this program, delinquencies could rise
- Lowering of LLPAs for cash-out refinances to lower the overall interest rate and make them a more competitive product
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