Congress Eyes Fannie and Freddie Wind Down
A housing finance reform bill unveiled by House Republicans July 11 would wind down Fannie Mae and Freddie Mac and also contains a number of regulatory relief provisions, including tweaks to the CFPB’s qualified mortgage rule and exam reform.
The Protecting American Taxpayers and Homeowners Act, which has not yet been introduced but is championed by House Financial Services Committee Chairman Jeb Hensarling (R-Texas), would replace Fannie Mae and Freddie Mac with a nongovernmental, not-for-profit entity. Both Fannie Mae and Freddie Mac would be eliminated within five years by shrinking their securities portfolio by 15% per year.
Also of interest to credit unions is a provision that incorporates the Financial Institutions Examination Fairness and Reform Act, which would establish an ombudsman outside of the NCUA to handle exam appeals, require that examiners to provide credit unions with documentation to support exam exception write-ups, and codify exam standards.
The bill would also delay implementation of Basel III capital standards for banks. Cheney said in his letter to Hensarling that he encourages the committee to similarly delay an NCUA rule under development that would reform capital standards by adding a risk-based requirement for credit unions with more than $50 million in assets.