WASHINGTON-CUNA economist Bill Hampel told Congress last week that credit unions and other community lenders should have a major role in creating and overseeing a proposed federally backed secondary mortgage market agency in the case of a wind down of Fannie Mae and Freddie Mac.
"As Congress considers housing finance reform, it is critical that credit unions have equitable and readily available access to a functioning, well-regulated secondary market," Hampel told the Senate Banking Committee, which is studying a bipartisan proposal that would wind down Fannie and Freddie by privatizing much of their functions, but create another government backstop in its place. The Senate hearing just came as the House Financial Services Committee was voting to endorse its own Fannie and Freddie plan.
Hampel and other witnesses from the Independent Community Bankers of America and the ABA expressed fear that a full privatization of the secondary market would leave community lenders at the mercy of a handful of big mortgage lenders.
Hampel asked Congress to reserve a seat for CUs on a five-member board that would oversee a Federal Mortgage Insurance Corp., which would guarantee residential mortgages and supervise the secondary market.
