Treasury, FHFA: Suspend Dividend Payments to Prevent Another Bailout
Washington, D.C. (Feb. 17, 2017)—The Independent Community Bankers of America® (ICBA) today urged the Treasury Department and Federal Housing Finance Agency to suspend payment of Fannie Mae and Freddie Mac dividends. Suspending the destructive sweep of the government-sponsored enterprises’ earnings directly to the U.S. Treasury would help protect consumers and avoid a future housing crisis.
“While compensating the U.S. Treasury for its support during the financial crisis is reasonable, bleeding Fannie Mae and Freddie Mac of all their earnings and capital is setting up our housing market and economy for another massive bailout,” ICBA President and CEO Camden R. Fine said. “The housing market depends on these enterprises for liquidity and stability. Meanwhile, the nation’s community banks rely on the GSEs for access to the secondary mortgage market, which allows these local institutions to continue meeting the mortgage-financing needs of their customers and communities through localized service and lending.”
With the latest earnings announcement, Fannie Mae and Freddie Mac will send an additional $10 billion to the U.S. Treasury, bringing their collective tally to $265 billion—or $78 billion more than the $187 billion provided by Treasury during the financial crisis.
Ending this destructive practice and letting Fannie Mae and Freddie Mac build capital while policymakers consider housing-finance reform will protect taxpayers, homebuyers and the housing industry while helping to prevent a self-imposed financial crisis.
The Independent Community Bankers of America®, the nation’s voice for nearly 6,000 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.