WASHINGTON – President Obama used his State of the Union address Tuesday evening to call for the creation of a new government-backed retirement savings account and reiterate a call for comprehensive housing finance reform.
In an address that largely avoided banking policy, Obama said he directed the Treasury Department to create a retirement savings vehicle called MyRA.
"Today, most workers don't have a pension," Obama said. "A Social Security check often isn't enough on its own. And while the stock market has doubled over the last five years, that doesn't help folks who don't have 401ks. That's why, tomorrow, I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA.
"It's a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in."
Obama offered few details on the new account, but a White House fact sheet said it would be offered through Roth IRA Accounts and, like a savings bond, would be backed by the U.S. government.
Banks may stand to benefit from additional fee income as a result of the new accounts if they are offered and managed by private institutions.
The president also made a very brief mention of housing finance reform, asking Congress to "send me legislation that protects taxpayers from footing the bill for a housing crisis ever again, and keeps the dream of homeownership alive for future generations of Americans."
The fact sheet reiterated Obama's position outlined last fall that he is seeking the end of Fannie Mae and Freddie Mac, calling it a "failed business model" that left taxpayers on the hook for "bad loans and bailouts."
The White House fact sheet praised Sens. Tim Johnson and Mike Crapo, the top two leaders on the Senate Banking Committee for "seeking to forge bipartisan legislation." The White House also praised Sens. Bob Corker and Mark Warner, another bipartisan team, who introduced legislation last year that would unwind Fannie and Freddie and create a new system that relies on an explicit but limited government guarantee in the mortgage market.
The fact sheet said any housing finance bill should "put private capital at the center of the housing finance system," ensure access to the 30-year fixed-rate mortgage and support affordability for first time homebuyers.
Obama touched on two other areas that are important to banks, even if they are not solely related to financial institutions. He called for the passage of patent reform to curb frivolous lawsuits that bedevil banks and other corporations accused of violating a patent. Obama also reiterated the need for immigration reform, which several large banks privately support.