CUNA Expresses Concerns about Proposed GSE Legislation in Letter to House Financial Services Committee Leaders

WASHINGTON – With mark up scheduled of legislation affecting the regulation of the housing Government Sponsored Enterprises, CUNA sent a letter to leaders of the House Financial Services Committee expressing its concerns about proposed legislation that would limit the ability of government sponsored enterprises from having any role in the mortgage-making process before loans are closed and funded. At press time, the committee was preparing to mark up legislation – H.R. 1461, the "Federal Housing Finance Reform Act of 2005″ – May 25. In a letter to Rep. Paul Kanjorski (D-Pa.), as well as to Committee Chairman Rep. Mike Oxley (R-Ohio), Ranking Member Barney Frank (D-Mass.) and Subcommittee Chairman Richard Baker (R-La.), CUNA President Dan Mica discussed the association's concern about the so-called "bright line" proposal which CUNA says could prevent the housing GSEs from having an earlier role in the mortgage process before loans are closed and funded. "This could preclude many GSE activities that have increased access to mortgage credit and have enhanced competition," Mica wrote. He further stated that, "We are also concerned with the proposals that may impact new programs offered by the GSEs. In addition to their role in the secondary market, the GSEs have supported innovation in mortgage products and programs, as well as technological improvements that address housing needs." Mica also made it clear that, "Currently, the Department of Housing and Urban Development (HUD) requires prior approval of these programs and products that are different than those that have been previously approved. The possible concern here is that further restricting the ability of the GSEs to offer new programs without prior approval could result in an enhanced regulatory process to obtain such approvals, with the result that this could hinder new programs, activities, or products that benefit the marketplace, including credit unions. We are pleased that the bill to be considered in mark-up appears to satisfy this concern." -