MBA Turns Up Heat on House in G-Fee Debate
The Mortgage Bankers Association stepped up its pressure on the House over a controversial bill that would allow budget appropriators to use Fannie Mae/Freddie Mac credit guaranty fees for highway projects.
In a Mortgage Action Alliance Call to Action and a separate statement, MBA called on the House to vote on an amendment to a highway reauthorization bill, H.R. 22 (https://www.congress.gov/bill/114th-congress/house-bill/22) that would remove an extension of an increase in Fannie Mae and Freddie Mac g-fees and a Federal Reserve bank stock dividend cut as funding sources for the proposal.
The amendment was introduced by Reps. Randy Neugebauer, R-Texas, and Bill Huizenga, R-Mich.
MBA President and CEO David Stevens said both of these funding measures, which are unrelated to the core purpose of the bill, would place undue burdens on homeowners, the housing sector, and banks of all sizes across the country.
“The purpose of these fees is to guard against credit losses at Fannie Mae and Freddie Mac and should only be used to protect taxpayers from mortgage losses,” Stevens said. “The amendment would also remove a harmful proposal to reduce the dividend paid on Federal Reserve stock, which would reduce the amount of capital banks of all sizes have to lend to small businesses and consumers. MBA urges the House to pass this amendment in order to protect taxpayers, consumers and the overall health of the housing and finance system.”
MBA said the g-fee increase, first enacted in 2011, has “harmed homeowners, continues to do so every day, and should not be extended to fund unrelated federal spending. Using the housing GSEs as a piggybank to fund unrelated government programs is bad policy–plain and simple–and it puts the nascent housing market recovery in jeopardy.”
Regarding the Federal Reserve dividend cut, MBA noted all member banks of the Federal Reserve System are required by law to purchase stock in regional Federal Reserve Banks. “This stock may not be sold, transferred or even used as collateral, unlike virtually every other asset a bank holds,” MBA said. “These funds represent ‘dead capital’ for the financial institution. Reducing the dividends paid on this stock would hurt banks of all sizes, all across the country.”
The amendment is slated to come up for a vote this week.
Earlier this week, MBA and other industry trade groups sent a letter to Capitol Hill reiterating their opposition to using g-fees for unrelated budget offsets http://mba.informz.net/MBA/data/images/Neugebauer-Huizenga amdt to HR22 (FINAL) (002).pdf.
For more information about the MBA Mortgage Action Alliance, click https://www.mba.org/get-involved/take-action-with-maa. Membership in MAA is voluntary and MBA membership is not a prerequisite.
