Testifying before the Senate Banking Committee today on behalf of the American Bankers Association, banker Brenda Hughes called for Congress to move ahead with housing finance reform that provides liquidity for the housing market and maintains access for community banks. She emphasized that an explicit, fully-priced, fully-paid-for federal guarantee for a targeted portion of the mortgage market will serve as a catalyst for broader market growth and development.
“These legislative reforms are critical,” said Hughes, who is SVP for mortgage and retail lending at First Federal Savings, Twin Falls, Idaho, and a former chairman of ABA’s Mortgage Markets Committee. “Congress should not defer action any longer. Nine years of conservatorship is more than enough.”
She highlighted the role of GSEs Fannie Mae and Freddie Mac in undergirding the long-term, fixed-rate mortgages Americans rely on and argued that while the prior implicit guarantee should be made explicit, Congress should also enact “surgical” reforms of the GSEs to ensure that they are capitalized appropriately and that safe and sound underwriting standards are enforced. “It will be necessary to incorporate into statute the mandate that the GSEs serve all primary market participants equitably in order to avoid the potential for backsliding,” she added.Email This Post