Credit union and banking trade associations teamed up in support of a Senate budget amendment that would put an end to funneling Fannie Mae and Freddie Mac guarantee fees toward deficit reduction.
Amendment #593, sponsored by Senate Banking Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho), was filed last week and received a thumbs-up letter of support from CUNA and NAFCU, as well as bank and real estate trade associations.
“G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans, and should be used only to manage the companies’ credit risk,” the trades said in a letter following Friday’s vote to pass the amendment.
“Increasing g-fees for other purposes effectively taxes potential homebuyers and consumers wishing to refinance their mortgages. G-fee increases unrelated to housing could also act to hinder the necessary reforms required of the housing finance system in the years ahead,” the letter said.
The Senate’s budget resolution, which also included an amendment in support of lifting regulatory burdens on community banks, passed by a narrow 50-49 vote. The House passed its own budget resolution on Thursday, and included a measure that would prevent an increase in federal wages.