CUNA urges the Federal Housing Finance Agency to provide more data to the public on how the application of its Enterprise Regulatory Capital Framework (ECRF) will affect guarantee fees before making any policy decisions. CUNA’s comments were sent in response to FHFA’s Fannie Mae and Freddie Mac single-family mortgage pricing framework Request for Input (RFI).

Guarantee fees are paid by the mortgage lender to cover administrative costs, expected credit losses, and the costs of capital associated with guaranteeing single-family mortgage loans

“America’s credit unions depend on the liquidity, stability, and affordability that the Enterprises provide. The guarantee fees set by the Enterprises, therefore, affect credit unions and their ability to provide their members with affordable mortgage credit,” the comments read. “Because of the wide-reaching effects that pricing decisions like setting guarantee fees can have on the safety and soundness of the Enterprises and equitable and sustainable access to mortgage credit, transparency and public engagement is vital to ensure that the Enterprises can continue to satisfy the purposes for which they were created.

CUNA reiterated its call that the FHFA undertake and release an analysis of the pricing impacts of the ECRF before moving forward.

“More transparency is also needed with respect to the targeted returns that FHFA has set for the Enterprises, and CUNA encourages FHFA to furnish more information about the Enterprises’ single-family targeted returns,” the letter reads. “The targeted returns on capital are used to mitigate against the underpricing of risk.”