No Chance for Quick Housing Overhaul

Rome wasn’t built in a day and an overhaul of federal housing finance programs won’t be either.

That was the clear message delivered by policymakers this week at NAFCU’s Congressional Caucus and a Senate Banking Committee hearing earlier this week.

The Trump Administration recently released a massive overhaul of federal housing finance programs. The proposal includes taking the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation out of federal control.

The plan includes myriad other legislative and rulemaking proposals that the administration officials said would help foster affordable housing.

However, Democrats, speaking at the NAFCU conference, said they doubted that.

Rep. Carolyn Maloney (D-N.Y.) said she believes the proposals would make housing even less affordable.

“That’s a non-starter for me,” she said.

Sen Gary Peters (D-Mich.) emphasized that any housing plan must ensure that credit unions continue to have access to the secondary housing markets.

Nonetheless, members of the House Financial Services Committee pledged that they will work together to craft a housing package.

“Complete comprehensive housing reform is going to take bipartisan compromise,” said Rep. Ed Perlmutter (D-Colo.).

Rep. Blaine Luetkemeyer (R-Mo.) agreed. 

“We’re going to sit across the table with our colleagues to see if we can get something done,” he said.

That bipartisanship may be difficult to achieve, as was demonstrated by a Senate Banking Committee hearing on Sep. 10.

“Many of the legislative recommendations in the plans that were released on Thursday are consistent with my outline to fix our housing finance system, including attracting private capital back into the market; protecting taxpayers against future bailouts; and promoting competition,” committee Chairman Mike Crapo (R-Id.) said.

The committee’s ranking Democrat, Sen. Sherrod Brown of Ohio, said the Trump plan fails to accomplish its goals.

“Rather than create a system that addresses the needs of working families, the Trump Administration has put out half-baked proposals that will make mortgages more expensive and harder to get,” he said.

In advance of the hearing, credit union trade groups sent letters outlining what credit unions need in any housing legislation.

In a letter to the Banking Committee, NAFCU Vice President of Legislative Affairs Brad Thaler said that while the administration can make some changes on its own, a legislative solution is needed.

He said any housing plan must guarantee access for community financial institutions, include fair pricing based on the quality, not quantity, of loans made and provide for a level playing field for institutions of all sizes to compete.

CUNA President/CEO Jim Nussle said access to the secondary market on an equitable basis is crucial to all lenders.

“A robust, smoothly functioning national housing finance system with an efficient, effective and fair secondary market that provides equal access to lenders of all sizes is a key concern for credit unions and the members they serve,” he wrote to the senators.