WASHINGTON, DC (April 28, 2014) --
Good evening,
Below is NAFCU President and CEO Dan Berger's letter to Senate Banking Committee Chairman Tim Johnson and Ranking Member Mike Crapo with respect to the scheduled Committee consideration of the "Housing Finance Reform and Taxpayer Protection Act of 2014" (S. 1217) discussion draft. Members of the Senate Banking Committee were copied on the letter.
In the letter, Berger reiterates that it is critical to small lenders such as credit unions, their member-borrowers and to the broader economy that any housing finance reform does not disrupt the current market. He also says that NAFCU is pleased and appreciative that the draft manager’s amendment addresses some of the issues and concerns the association has shared with the Committee but even with these proposed amendments, the association still has serious concerns about overall costs and workability of the proposed new system.
Berger urges that the Committee address the outstanding concerns and recommendations from NAFCU's April 11, 2014, joint letter with the Credit Union National Association (CUNA) and Independent Community Bankers of America (ICBA), which the association has again enclosed for their information.
If you would like more information on this matter or would like to speak about this with a NAFCU expert, please let me know.
Thank you.
Patty Briotta
Director of Public Relations
National Association of Federal Credit Unions
3138 10th Street North
Arlington, VA 22201
Phone: 703-842-2820
Cell: 703-200-4600
Fax: 703-524-1082
pbriotta@nafcu.org
April 28, 2014
Re: Committee Mark-Up of Housing Finance Reform Legislation
Dear Chairman Johnson and Ranking Member Crapo:
On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association exclusively representing the interests of our nation’s federal credit unions, I write today with respect to the scheduled Committee consideration of the Housing Finance Reform and Taxpayer Protection Act of 2014 (S. 1217) discussion draft. As you know, the future of housing finance is of great importance to our nation’s credit unions. Liquidity in the secondary market is critical in order to meet the mortgage needs of over 97 million credit union members across the country. First and foremost, we would like to thank you and your staff for your willingness to work with us throughout the housing finance reform discussion process.
As we have communicated to you previously, it is critical to small lenders such as credit unions, their member-borrowers and to the broader economy that any housing finance reform does not disrupt the current market. At present, the secondary market structure works well for credit unions and allows them to meet their members’ needs. Restructuring of this system is unchartered and unprecedented, and therefore raises numerous questions regarding the cost and functionality of a new system. We understand some of the specific details and costs of the proposal are still unknown, a fact that compounds the uncertainty faced by credit unions and their member-owners regarding the new system.
NAFCU is pleased and appreciative that the draft manager’s amendment addresses some of the issues and concerns we have shared with the Committee, such as: 1) vertical integration - prohibiting guarantors from having an affiliation with single family mortgage originators; 2) providing for a streamlined process for small lenders to join the proposed mutual corporation; and 3) making specific technical clarifications relating to credit unions in the legislation.
Even with these proposed amendments, NAFCU still has serious concerns about overall costs and workability of the proposed new system. Furthermore, we would also continue to urge that the Committee address the outstanding concerns and recommendations from our April 11, 2014, joint letter with the Credit Union National Association (CUNA) and Independent Community Bankers of America (ICBA), which we have again enclosed for your information.
As the Committee considers amendments at the mark-up, we would also urge support for those proposals that would tackle some of these outstanding concerns, and improve the current mortgage market. NAFCU would support providing relief from the Qualified Mortgage (QM) standard, limiting and clarifying the regulatory scope of the new Federal Mortgage Insurance Corporation (FMIC), and ensuring credit union input and specific experience is required at various decision making levels in the new system.
Housing finance reform must ensure equal and competitive access for credit unions, while avoiding further concentration of the primary and secondary mortgage markets to the largest of lenders and Wall Street firms. We continue to believe it is critical that any increased costs associated with establishing a new housing finance system be minimal so as to not increase the cost of borrowing for consumers.
I thank you for this opportunity to provide input on this critical issue. If my colleagues or I can be of assistance to you, or if you have any questions regarding this issue, please feel free to contact myself, or NAFCU’s Vice President of Legislative Affairs, Brad Thaler at (703) 842-2204.
Sincerely,
B. Dan Berger
President and CEO