FOR IMMEDIATE RELEASE
ICBA Stresses Need for Independence in Regulation of Housing GSEs
Washington, D.C. (Oct. 23, 2003) - Testifying today on behalf of the Independent Community Bankers of America, Dale J. Torpey told the Senate Banking Committee that the ICBA does not believe that the Treasury Department should direct the housing policy of our nation, just as it should not run its monetary policy. Torpey testified at the second hearing held by the Senate Banking Committee recently on proposals to improve regulation of the housing government-sponsored enterprises (GSEs).
Torpey is president and CEO of Federation Bank, a $115 million asset bank in Washington, Iowa. He also currently serves as chairman of ICBA's Lending Committee.
"ICBA continues to hold the view that the FHLBanks should be regulated by a separate and independent agency," Torpey testified. Regarding proposals to bring the regulation of Fannie Mae and Freddie Mac under the Treasury Department, Torpey said, "We strongly urge Congress to make certain that any potential legislation contains appropriate firewalls and independence between Fannie and Freddie and the Treasury's politically-appointed policy makers."
Torpey stated that while it is not ICBA's first preference, ICBA may not oppose the concept of a new independent regulator for all three housing GSEs outside Treasury, depending on how key details are fleshed out. In particular, the unique ownership, operational and capital structure and mission of the FHLBanks would have to be recognized and preserved.
Torpey also urged Congress to carefully and fully consider the issues associated with housing GSE regulation before rushing to action. "We concur with the sentiments expressed by a number of members of this Committee that it is imperative that any regulatory restructuring be done right given its potential impact on the crucial housing sector of our economy and on community banks' continued ability to meet the lending needs of Main Street America," concluded Torpey.
For more information about ICBA, including a source list of financial industry experts, visit the trade association's online pressroom at www.icba.org/pressroom.