ICBA News Release
FOR IMMEDIATE RELEASE
ICBA Supports Improved GSE Regulation
Opposes Provisions to Impose Portfolio Limits in Mortgage Assets
Washington, D.C. (October 25, 2005) - The Independent Community Bankers of America (ICBA) told Congress it supports a House Financial Services Committee bill (H.R. 1461) to improve regulation of the housing government sponsored agencies (GSEs). At the same time, ICBA urged lawmakers not to impose portfolio limits that potentially could limit GSE investment in housing. Investment limits imposed by a new regulator should not go beyond comparable safety and soundness authority available to federal banking regulators.
"ICBA supports Congressional efforts to improve the regulation of the housing GSEs, but opposes amendments that would weaken them or undermine their ability to fulfill their housing mission," said David E. Hayes, ICBA chairman and president and CEO of Security Bank of Dyersburg, Tenn. "The housing GSEs, Fannie Mae, Freddie Mac and the Federal Home Loan Banks, give community banks access to the capital markets on an equitable basis that is vital to our customers' ability to obtain home financing."
In a letter to Congress prior to scheduled House floor action on the measure, ICBA pointed to two amendments that could weaken the housing mission of the GSEs. One would limit the types of housing assets the GSEs could hold. But ICBA said current requirements are sufficient to ensure that they do not stray into non-housing investments.
A second amendment would require the GSE regulator to determine whether GSE holdings pose risk to the housing or capital markets or to the financial system when exercising new unprecedented authority to limit the growth and size of the portfolios. "A new regulator should not be thrust into this economic and philosophical thicket. Like traditional bank regulators, it will be fully occupied in maintaining the safety and soundness of the institutions they must supervise," said Hayes.
ICBA adds that the nation's housing and capital markets have been especially strong in recent years, and the financial system remarkably stable, trends that coincide with the current GSE portfolios. "At a minimum, this demonstrates that these portfolios are consistent with financial stability," ICBA said.
View the full letter at www.icba.org.