The American Bankers Association today submitted a list of recommendations for the Federal Housing Finance Agency to include in its proposed strategic plan, including suggestions concerning supervision of Fannie Mae, Freddie Mac and the Federal Home Loan Banks.
The FHFA recently released a draft strategic plan to guide the agency over the next four years. In a comment letter, ABA shared multiple recommendations put forward by its GSE Policy Working Group and other committees to guide the agency as it finalizes the plan.
“We support the principles of strong oversight, sound operations and a housing finance system that works for all communities,” ABA said. “At the same time, we believe the plan presents an important opportunity to ensure that banks of all sizes, including particularly smaller and local institutions, are considered as key stakeholders and partners in achieving these goals.”
Among the many recommendations:
- FHFA should ensure that any heightened oversight or new standards for Fannie and Freddie account for smaller institutions’ resource constraints and do not inadvertently raise barriers to bank participation.
- The agency should work closely with banks to understand how oversight changes of Fannie and Freddie will affect banks’ mortgage operations and ability to serve borrowers in local communities.
- With regard to the FHLBank system, the agency must recognize that community banks depend on stable, cost-efficient advances to support local lending. Oversight should balance safety and soundness with functional access.
- Consider allowing Affordable Housing Program grants, or similar grants, to be awarded to banks that serve as conduits by transmitting the funds to local builders constructing 1-4 family housing.
- As FHFA sets new standards, oversight expectations or data/reporting frameworks, a size/complexity lens should be applied so that smaller banks are not disadvantaged or discouraged from mortgage lending.
- FHFA should hold listening sessions, advisory roundtables and forums that facilitate feedback from banks of all sizes before making important policy changes.
