WASHINGTON (11/6/13)--At a Thursday Senate Banking Committee hearing on housing finance reform, some panel members indicated they were eager to get things moving to achieve legislative fixes to what many see as a broken system.
|CUNA Chief Economist Bill Hampel, left, speaks with Senate Banking Committee Chairman Tim Johnson (D-S.D.) following Tuesday's hearing. (CUNA Photo)|
The hearing was entitled "Housing Finance Reform: Protecting Small Lender Access to the Secondary Mortgage Market." The Credit Union National Association testified. (See related story: CUNA: Stable, Reformed Secondary Mortgage Market Vital For CUs And Members.)
During the hearing's early minutes, Sen. Mike Crapo (Idaho), who is the ranking Republican member of the committee, noted that he and his panel colleagues are "working hard to get a markup ready...in near future" for a housing finance reform bill.
He asked the panel of witnesses, representing credit unions, community banks and Federal Home Loan Banks (FHLB), whether they were ready and willing to work together and to work with the committee to hammer out details of a new housing finance system. CUNA witness Bill Hampel assured that credit unions were willing and ready. Hampel is a CUNA senior vice president and its chief economist.
Another committee member, Sen. Elizabeth Warren (D-Mass.), said committee members clearly agreed that small lenders need access to the secondary market so they can write more mortgages and get FHLB advances.
Also, the head of the committee, Sen. Tim Johnson (D-S.D.), called on the U.S. Congress to work together to move forward on reforms. Hampel was the recipient of the chairman's first follow-up question after all prepared testimony was delivered. Hampel responded to Johnson that it is "absolutely essential" that Congress get it right as they rework the mortgage financing market.
Credit unions do need access to secondary market, and that access needs to be done right, Hampel said. The previous system did not work, and contributed to the financial crisis, but there are pieces of the previous system that need to be maintained and brought into the new system, fixing the design flaws as we do so, Hampel added. (Use resource link for CUNA's complete testimony.)
The hearing also focused on the Housing Finance Reform and Taxpayer Protection Act (S. 1217). That bill, introduced by Sens. Bob Corker (R-Tenn.) and Mark Warner (D-Va.), would wind down government-sponsored enterprises Fannie Mae and Freddie Mac and replace them with a new mortgage guarantor.
In a discussion of the bill with Warner, Hampel noted that such a transition of housing finance functions to new entities needs to be "gradual" and "seamless." Warner remarked that he would appreciate seeing more comments on that.
Warner, during Tuesday's hearing, noted there are ways to improve S. 1217, and encouraged Hampel and others that testified to provide specific guidance to committee staff on how the bill could be bettered.