WASHINGTON—NAFCU has offered the association's insights and recommendations in response to the Federal Housing Finance Agency's (FHFA) request for information on climate change and natural disaster risk to the housing finance system and the government-sponsored enterprises.
In the letter, NAFCU Directory of Regulatory Affairs Ann Kossachev encouraged the FHFA to work with other members of the Financial Stability Oversight Council (FSOC) – including the NCUA – to coordinate efforts on climate risk policies to ensure a liquid and stable mortgage market well into the future.
Kossachev also encouraged the FHFA to continue to solicit stakeholder feedback and to additionally engage in discussion with climate experts to “define, define, identify, and clarify climate risks to the mortgage markets could generate more meaningful engagement from financial sector stakeholders that may not have a complete understanding of the analytical methods used to assess climate risk.”
Delay is Urge
In addition, Kossachev asked that the FHFA wait to make any changes until after the Federal Emergency Management Agency initiate an effort to update flood maps and determine the most accurate flood risks. Kossachev stated that any federal, state, and local coordination must recognize the unique nature of credit unions and ensure that any policy changes do not penalize institutions that may have a higher concentration of climate risk.
Finally, Kossachev called on the FHFA to closely evaluate its affordable housing efforts to account for climate change risk specifically for minority and low- and moderate-income borrowers, pursue pilot programs to help borrowers build wealth, and evaluate the impact any policies may have on the Federal Home loan Banks program.