ARLINGTON, Va.– Both credit union trade groups are expressing support for an announcement by the Treasury Department and Federal Housing Finance Agency (FHFA) that Fannie Mae and Freddie Mac (GSEs) will be permitted to retain more capital.
“The Treasury Department and FHFA’s decision to allow Fannie Mae and Freddie Mac to begin retaining capital reserves is central to preserving the safety and soundness of our housing finance system, and it will help place the GSEs on stronger financial footing,” said NAFCU President and CEO Dan Berger. “As housing reform continues to move forward, NAFCU will continue to work with the Administration, as well as Congress to push for legislative action that would ensure credit unions and other small community-based lenders have guaranteed access to the secondary mortgage market.”
CUNA Response
Separately, CUNA CEO Jim Nussle said, "CUNA applauds efforts by the Federal Housing Finance Agency and the Department of the Treasury to modify the existing agreements and allow both Fannie Mae and Freddie Mac to retain additional capital. CUNA has been a long-standing proponent of federal efforts to ensure that any federal housing finance reform efforts are designed to ensure a smooth transition to any modified secondary market for mortgage loans for smaller lenders that also recognizes the importance of credit unions and the role they play in providing access to mortgage credit.”
CUNA said it strongly supports housing finance reform principles that ensure community lenders such as credit unions are a part of the system, principles that include:
* Equal access to lenders of all sizes on an equitable basis
* Affordability that incudes recognition of the fact that smaller lenders, such as credit unions, often meet mortgage needs that banks are unwilling or unable to address in rural and working-class communities that require greater flexibility in underwriting requirements and weigh against mandatory minimum down payments
* A reasonable and orderly transition to a new housing finance system. Accordingly, efforts to transfer guarantee oversight authority to entities, such as Ginnie Mae, must honestly assess and plan for potential frustrations if not acknowledged, addressed, and corrected well in advance of any transition
* Strong oversight and supervision to ensure the safety and soundness of secondary market entities
* Durability, by including an explicit federally insured or guaranteed component to ensure that, even in troubled economic times, the secondary mortgage market continues to exist
* Preserving what works, such as cost-effective and member-oriented credit union mortgage servicing options, emphasizing consumer education and home-purchase counseling, and applying reasonable conforming loan limits that adequately consider local real estate expenses in higher cost areas.