WASHINGTON (4/29/14, UPDATED 10:45 A.M. ET)--The Senate Banking Committee postponed the markup of S. 1217, the Johnson-Crapo Housing Finance Reform bill, in response to committee members, according to a statement from Chairman Tim Johnson (D-S.D.).
"As all of the members already know, there continue to be important discussions to build a larger coalition supporting the bill. While we have the votes to report the bill out today, members of the Committee have asked for a brief delay to try to work out additional issues prior to a final vote," Johnson's statement said. "I have talked with ranking member (Mike) Crapo, and we will continue working with interested members on both sides. Staff will notify members when the committee is set to reconvene in the coming days."
Important changes backed by the Credit Union National Association were included in the draft manager's amendment to S. 1217 prior to the vote that is now scheduled for Wednesday. The Senate Banking Committee is expected to vote on numerous amendments to the legislation's provisions.
"Markup of this legislation is one of the most significant activity to take place in the Banking Committee since the Dodd-Frank Act," CUNA Senior Vice President of Legislative Affairs Ryan Donovan said Monday. He added that lawmakers will be using the amendment process to continue to build the bill's strong bipartisan support while trying to ensure that any changes do not undermine the intent of the legislation.
CUNA, as part of a coalition with the National Association of Federal Credit Unions and the Independent Community Bankers of America, sent a recent letter to key lawmakers seeking changes to the draft bill. In part, the changes would address:
The April 11 letter was addressed to Johnson and Crapo (R-Idaho)--the chief sponsors of the housing finance reform bill.
The Senate bill proposes to replace government-sponsored enterprises Freddie Mac and Fannie Mae with a single agency that would be supported by the housing industry. It would also set stricter underwriting standards for new mortgage loans--and reduce taxpayer exposure to housing market busts.
CUNA, along with other major financial trades groups, backed an expected amendment Monday regarding the new proposed agency--the Federal Mortgage Insurance Corporation (FMIC). CUNA expressed concern that, as proposed, the FMIC would "create yet another prudential regulator with sweeping authority over the primary and secondary mortgage markets."
CUNA warned that would result in unnecessary complications for financial institutions, consumers and the broader mortgage market and backed a bipartisan amendment introduced by Sens. Jerry Moran (R-Kan.) and Joe Manchin (D-W.Va.) to improve the FMIC governance structure.
CUNA also joined the effort by another broad coalition to defuse a threat posed by a new eminent domain scheme. CUNA is backing an amendment from Sens. Patrick Toomey (Penn.) and Tom Coburn (Okla.). The Republican duo are expected to offer language that would ban any municipality from using its eminent domain power to acquire performing but underwater mortgage loans held by private-label mortgage-backed securities and then refinancing the loans through programs administered by the Federal Housing Administration. Such a maneuver, CUNA and the coalition said, could devastate investor confidence in the country's mortgage markets.
CUNA's Donovan underscored Monday that the Senate Banking Committee votes occur within a "very fluid situation." In addition to the manager's amendment circulated to CUNA and other stakeholder over last weekend, there are several dozen more amendments that could be offered during the markup process.
"A lot of pre-markup negotiations have taken place over the last few weeks," Donovan said. "The pace and depth of these discussion have accelerated over the last two weeks. We expect the bill will clear the committee, the question is by what margin."