FOR IMMEDIATE RELEASE
ICBA Joins Call to Enhance GSE Reform Bill
Coalition Proposes Amendment to H.R. 1461
Washington, D.C. (May 23, 2005) - Independent Community Bankers of America (ICBA), the nation's largest banking trade organization, joined with other trade and consumer organizations in urging the House Financial Services Committee to adopt a proposed amendment to the current proposed legislation on GSE reform.
In the letter to Chairman Michael Oxley (R-OH) and Ranking Member Barney Frank (D-MA), the groups agreed that the GSEs should establish a consultative relationship with their regulator regarding the introduction of new programs, but said that they "have serious concerns about imposing program and product approval processes that diminish marketplace innovation, hamper consumer initiatives, or reduce competitiveness."
The group drafted an amendment that would strengthen the proposed bill with minimal technical changes and revisions. The amendment would:
- Endorse dual structure of a notice and comment, prior approval process for major new programs and a more streamlined notice-based process for new business activities;
- Narrowly define "new mortgage product" and ensure they are subject to the streamlined new activity review, not the more cumbersome new program approval process;
- Clarify that the new business activity review process permits activities that meet certain requirements to move ahead unless disapproved the Director within 30 days, while allowing for even faster time-to-market if the Director issues written approval before 30 days;
- Eliminate the need to establish definitions of the primary and secondary mortgage markets;
- Insure that activities with non-profit organizations and consumer initiatives are not subject to the new program approval process and are consistent with expanding homeownership to underserved markets and minorities.
"Many community banks rely on the GSEs for program and technology innovations to help them meet the housing finance needs in their communities," said Camden R. Fine, President and CEO of ICBA. "We hope the committee will carefully consider this amendment in order to enact legislation that ensures the safety and soundness of the GSEs without diminishing their ability to help more American's become homeowners."
The full text of the letter can be found at www.icba.org/pressroom.