Housing Finance Reform Clears Committee
Housing finance reform legislation passed the Senate Banking Committee by a vote of 13-9 on Thursday.
The Housing Finance Reform and Taxpayer Protection Act now will be reported to the full Senate.
“I remain concerned that this bill in its current form does not do enough to produce a housing market that works for middle class America,” said Sen. Elizabeth Warren (D-Mass.), who voted against the bill.
The legislation would phase out Fannie Mae and Freddie Mac and replace the Federal Housing Finance Agency with the Federal Mortgage Insurance Corporation.
The FMIC would provide insurance on certain mortgage backed securities and regulate the secondary mortgage market. Under the bill, a mutual securitization company would also be created to assist small lenders access the secondary market.
The credit union trades also reacted to the bill’s committee approval.
“We still have concerns about the bill and its impact on credit unions, including the potential cost of the proposal and whether it would be workable. It is important that any ultimate housing finance reform package work for credit unions and their 97 million members, and we look forward to working with the full Senate to address our concerns should the legislation come to the Senate floor,” said NAFCU President/CEO Dan Berger.
CUNA President/CEO Bill Cheney, following the vote, said, "It's critical that government-sponsored enterprise reform ensures equal and competitive access for credit unions and other small lenders to the housing finance market – and avoids further concentration of the primary and secondary mortgage markets to Wall Street and the largest of lenders.
Earlier this week, Mel Watt, the new director of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, outlined a three-part strategy for making more credit available to borrowers.