Senate Banking Leaders Urge G-fees Stay Out of Budget Reconcilations
December 5, 2013
WASHINGTON (12/6/13)--Credit risk guarantee fees charged by government-sponsored enterprises Fannie Mae and Freddie Mac must not be used as a potential revenue source during budget reconciliation talks, the leadership of the Senate Banking Committee urged the leaders of both the House and Senate Budget Committees Thursday.
"The guarantee fees are charged to cover losses in incurred by Fannie Mae and Freddie Mac," wrote Sens. Tim Johnson (D-S.D.) and Mike Crapo (R-Idaho), of the banking committee.
"Each time they are increased and diverted for unrelated spending, homeowners are charged more for their mortgages and taxpayers are exposed to additional risk," the senators wrote Thursday. They added that each of the offsets makes reforming Fannie and Freddie more difficult because it increases the price tag of any legislation.
The Credit Union National Association also strongly opposes the use of the fees as a revenue source and has communicated that opposition in letters to federal lawmakers. CUNA has argued that guarantee fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans. Increasing guarantee fees for other purposes effectively taxes potential homebuyers and consumers wishing to refinance their mortgages, CUNA has warned.
In the senators' letter, Johnson and Crapo noted that earlier this year an amendment, cosponsored by every member of the Senate banking panel, was included in the Senate Budget Resolution by unanimous consent.
"As you continue to negotiate an agreement on a budget, we urge you to uphold the intent of our bipartisan amendment and refrain from using guarantee fees as an offset," they concluded.
The letter was sent to Sens. Patty Murray (D-Wash.) and Jeff Sessions (R-Ala.) and to Reps. Paul Ryan (R-Wis.) and Chris Van Hollen (D-Md.).