CUNA Chief Economist Bill Hampel will testify Tuesday before theSenate Banking Committee's Securities, Insurance and Investmentsubcommittee regarding the need for credit unions to retain accessto the secondary mortgage market as Congress mulls majorreform.

The Housing Finance Reform and Taxpayer Protection Act, introducedJune 25 by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.),would wind down Fannie Mae, Freddie Mac and the entire FHFA withinfive years, sell off their assets and revoke their federalcharters. Like the Protecting American Taxpayers and Homeowners Actsoon to be introduced in the House, individual loans would bepackaged into securities by private investors, although the Housebill would also allow for Federal Home Loan Banks to serve as loanaggregators.

However, the Corker-Warner bill differs from the GOP-supportedHouse bill in that the Senate bill would replace the FHFA with aFederal Mortgage Insurance Corp. that would retain some form of thefederal guarantee currently provided by Fannie and Freddie.

Despite language in both bills that reassures community lendersthey would retain access to the secondary market, tradeassociations for both credit unions and banks have expressed doubtthe legislation would ensure unfettered access in practice.

The Corker-Warner bill has just eight co-sponsors, and BankingCommittee Chairman Tim Johnson (D-S.D.) said in June when the billwas introduced that the committee would first tackle the “moretimely issue” of Federal Housing Administration solvency beforeattempting housing finance reform.

The PATH Act has considerably more momentum in the House; theFinancial Services Committee is scheduled to begin mark up on that bill Tuesday. While the bill has strongRepublican support, House Democrats oppose it and are fightingChairman Jeb Hensarling's (R-Texas) efforts to complete mark-upbefore an upcoming Congressional recess that spans most ofAugust.

Hampel will be joined at Tuesday's hearing by other witnessesthat include two bankers representing the Independent CommunityBankers of America and the American Bankers Association, thePresident of the Federal Home Loan Bank of Topeka and a FederalHousing Finance Agency executive. The hearing begins at 3 p.m. inthe committee hearing room on Capitol Hill.–[email protected]