FHFA Should Continue Partnerships Between CUs, FHLBs, GSEs

Credit unions play an important role in the housing finance market, and have a vested interest in the ongoing stability of the secondary mortgage market that the next director of the Federal Housing Finance Agency (FHFA) will help oversee, CUNA wrote to the Senate Banking Committee Thursday. The committee heard testimony from several presidential nominees Thursday, including from Mark Calabria, current chief economist to Vice President Mike Pence and nominee to serve as director of the FHFA.

CUNA does not historically take a position on presidential nominees and did not take any position on the merits of Calabria’s nomination.

“The next FHFA Director can build upon and strengthen the existing partnerships between credit unions, Government-Sponsored Enterprises, and Federal Home Loan Banks by ensuring access to responsible and affordable mortgage credit for millions of credit union members,” the letter reads. “Going forward, CUNA will continue to work with the Agency and its new leadership to accomplish that objective.”

While reforming the current housing finance system, CUNA believes it is essential that the new FHFA director prioritize:

  • Equal access: The secondary market must be accessible to lenders of all sizes on an equitable basis;
  • Affordability: The housing finance system must continue to provide qualified consumers with access to predictable, affordable mortgage payments;
  • A reasonable and orderly transition: Any transition to a new housing finance system must be reasonable and orderly;
  • Strong oversight and supervision: Secondary market entities must be subject to appropriate regulatory and supervisory oversight to ensure their safety and soundness;
  • Durability: The housing finance system should include an explicit federally insured or guaranteed component to ensure that, even in troubled economic times, the secondary mortgage market continues to exist; and
  • Preserving what works: The housing finance system should preserve the processes that work, 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.

The Senate Banking Committee also heard testimony from NCUA board nominees Rodney Hood and Todd Harper. CUNA submitted a letter on their nominations as well (see related story).