WASHINGTON – Speakers at Tuesday’s NAFCU Congressional Caucus provided an intimate exchange with attendees, speaking off the cuff, answering questions from the audience and even leaving the podium to speak from the Mayflower Hotel ballroom floor.
The agenda featured members of the House Financial Services Committee, including the committee’s chairman, Rep. Jeb Hensarling, (R-Texas), along with Rep. Robert Hurt (R-Va.) and Rep. Michael Grimm (R-N.Y.).
Hensarling spent the bulk of his speaking time promoting the PATH Act, a bill introduced by House GOP leaders that would wind down Fannie Mae and Freddie Mac and replace them with a mostly privatized secondary mortgage market. He pressed that housing finance reform is critical to breaking the cycle of boom, bust and bailout.
Interestingly, Hensarling cautioned his audience about asking members of Congress for regulatory relief and to also sustain a permanent government subsidy, which he said would be a challenge for many.
Oversight of the Consumer Financial Protection Bureau was also a topic Hensarling covered, timely as CFPB Director Richard Cordray will present the bureau’s semi-annual report to the House Thursday before Hensarling’s committee. In April, the chairman refused to allow Cordray to testify before the committee pending his confirmation.
While Hensarling acknowledged that Cordray has a good reputation, he also said he has too much power, and the GOP leader said his committee will continue to conduct hearings that increase the bureau’s accountability.
Hurt delivered a speech that covered Dodd-Frank regulatory burdens and GSE reform, and took questions from the audience, including one from Ed Templeton, NAFCU board member and president/CEO of the $670 million SRP Federal Credit Union of North Augusta, S.C.
In response to Templeton’s question about what will happen to the pricing of mortgages if the government guarantee is eliminated, Hurt acknowledged that some experts have said lenders will charge borrowers additional points to cover risk. However, he added that others have declared the move a wash, saying efficiency and underwriting would improve.
“You cannot underestimate the innovation—we see it every day—that takes place in a free market,” he said.
Hurt also told Templeton the PATH Act explicitly protects secondary market access to lenders of all size.
Sen. Tim Scott (R-S.C.) entertained the crowd with impromptu humor and a personal story about a life lesson he learned over the Labor Day weekend from his 93-year-old grandfather. Scott, who served on a credit union board for seven years, said he would protect the credit union tax exemption and vote in support of raising the member business lending cap.
In response to an audience question asking the best way for credit union executives to influence legislators, Scott said he prefers face-to-face visits.
“If you take the time to hand write a letter, I want to see it,” he said.
He also cautioned that Congress could put off passing legislation until the end of the year, and combine several issues into one large bill, using the Holidays as pressure to push it through.
NCUA Board Member Michael Fryzel in his speech challenged credit unions to increase membership in the U.S. to 200 million, more than double the current number. He cautioned that the effort would vision, investment and inconvenience.
“It will take more than walking the halls of Congress,” Fryzel said. “It will require pressing lawmakers to work with us and getting the legislation we need written and passed. It will take work in the communities you serve with your own board and employees. The financial crisis has mainly passed. The healing has begun. But important work remains.”
Specifically, Fryzel voiced his support of raising the member business lending cap and allowing credit unions to raise supplemental capital.