Credit unions provide a vital partnership in helping the Federal Housing Finance Agency (FHFA) achieve its housing mission and goals, CUNA wrote to House Financial Services Committee leaders Tuesday for its hearing on FHFA oversight.

“During 2022, credit unions originated $237 billion in first-lien mortgages, and they sold more than 16% of those mortgage loans into the secondary market,” CUNA wrote. “Therefore, credit unions have a considerable interest in ensuring that the FHFA-regulated entities, which include [Government-sponsored Enterprises Fannie Mae and Freddie Mac] and the Federal Home Loan Bank System (FHLBanks), operate effectively and efficiently and satisfy their core missions to benefit low- and moderate-income borrowers and communities.

“CUNA has continuously championed that the housing finance system must ensure that lenders of all sizes have equal access to the secondary mortgage market,” it adds. “Moreover, the Enterprises “must be subject to appropriate regulatory and supervisory oversight to ensure safety and soundness.”

Other highlights include:

• CUNA applauds the FHFA’s recent decision to rescind that DTI ratio-based upfront fee because many credit unions and other industry stakeholders voiced serious operational concerns about the fee.
• Potential limitations conditioning access to the FHLBanks to the quantity of mortgage loans or limiting use of the funds for mortgage lending and community investment would reduce credit unions’ ability to help their members achieve their affordable housing goals.
• Permitting credit union service organizations (CUSOs) to access the FHLBanks would not create additional risks to the safety and soundness of the FHLBanks because the credit unions that own CUSOs are supervised by state and/or federal regulators.
• Any newly allocated funding or created programs should first require a careful assessment of the potential collateral impact on the balance sheets of the FHLBanks and the bank system as a whole.