Washington, D.C (June 18, 2018)—The Independent Community Bankers of America® (ICBA) and other organizations today applauded Federal Housing Finance Agency Director Mel Watt for proposing to issue new capital rules for Fannie Mae and Freddie Mac and called on him to go further. The signators representing civil rights organizations and trade associations also urged Watt to direct the enterprises to develop capital restoration plans and to suspend the systematic sweep of the GSEs’ revenues into government coffers to increase their capital buffers.
“Development of capital restoration plans and suspending the net-worth sweep are crucial first steps to rebuilding capital buffers, and to accelerating the date when the GSEs can finally be released from conservatorship as safe, reformed, regulated mortgage aggregators for lending institutions of all sizes and charters,” the coalition wrote in a letter to Watt. “These first steps help protect the taxpayers and help enable the GSEs to fulfill their statutory mandate of facilitating the financing of affordable housing for low- and moderate-income families while maintaining a strong financial condition.”
Today’s letter is consistent with ICBA’s longstanding calls for allowing the GSEs to rebuild their capital buffers, as is laid out in ICBA’s Principles for GSE Reform white paper and required by the Housing and Economic Recovery Act of 2008. After 10 years in conservatorship, only a strongly capitalized secondary market and an end to the systematic sweep of GSE revenues into government coffers can protect taxpayers and provide the liquidity needed to support the mortgage market.
Today’s letter was also signed by the Community Home Lenders of America, Leadership Conference on Civil and Human Rights, Leading Builders of America, NAACP, National Community Reinvestment Coalition, National Urban League, Prosperity Now, and Community Mortgage Lenders of America.
The Independent Community Bankers of America®, the nation’s voice for nearly 5,700 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit ICBA’s website at www.icba.org.