Senate Banking Committee Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho, announced that they have reached an agreement on a housing finance reform proposal that would protect access to secondary markets and guarantee the availability of the 30-year mortgage product.
MCUL & Affiliates CEO David Adams said that initial accounts of the Johnson-Crapo proposal are promising.
“The MCUL will work closely with CUNA on GSE reform legislation,” Adams said. “While it is encouraging to see clear signs of support for smaller lenders in this bill, there remain significant gaps between the Senate and House versions. Both parties and both chambers recognize the need for drastic reforms. We will participate in the process actively with this Congress as well as the next one, if necessary.”
Last fall, the Senate Banking Committee hosted an in-depth series of hearings exploring essential elements necessary for reform. Over the past few months they have been negotiating and drafting the reform proposal. The bipartisan agreement includes measures from committee members on both sides of the aisle, the Obama Administration and stakeholders. Johnson and Crapo are putting finishing touches on draft legislative text that they plan to release publicly in the coming days.
“There is near unanimous agreement that our current housing finance system is not sustainable in the long-term and reform is necessary to help strengthen and stabilize the economy,” Johnson said. “This bipartisan effort will provide the market the certainty it needs, while preserving fair and affordable housing throughout the country.”
“This agreement moves us closer to ending the five-year status quo and beginning the wind down of Fannie and Freddie while protecting taxpayers with strong private capital, building the components for a stable secondary market and avoiding repeating the mistakes of the past,” Crapo said. “Government control of Fannie and Freddie with no private capital to protect taxpayers against losses is unacceptable.”
Chairman Johnson and Ranking Member Crapo agree that the status quo in which Fannie Mae and Freddie Mac remain in conservatorship is not a viable option for the nation’s housing finance system. To move forward, the following principles need to be reflected in any housing finance reform legislation:
Click here to read the full joint press release from Johnson and Crapo. Upload attached document