Fannie Mae Reform Eyed ByCUs

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WASHINGTON - (12/23/04) -- The growing accounting scandal atFannie Mae, which forced this week's ouster of two top executivesat the company, is expected to speed legislative reforms of thesecondary mortgage market that were fought by both Fannie andFreddie Mac. "There will be a big legislative push to do somethingonce Congress comes back. The question is, how far will it go?"said Gary Kohn, a CUNA lobbyist. Jonathan Lindley, a long-timecredit union and S&L lobbyist, said he believes the reform willnow go further than simply moving the Fannie and Freddie regulatorfrom HUD to the Treasury Department, but will also bring theFederal Home Loan Bank System a growing source of credit unionliquidity, under the same regulator. Fred Becker, president ofNAFCU, which has a three-year partnership with Fannie Maedeveloping a credit union pipeline to the secondary market,emphasized the importance of both government sponsored enterprisesto credit unions. "NAFCU's interest is simple, and credit union'sinterest is simple, and that is to insure that we continue to havea viable source, or sources, to securitize your (credit unions')mortgages and get them off your books," Becker told The CreditUnion Journal. John McKechnie, chief lobbyist for CUNA, said theincreased focus on the issue is likely to crowd regulatory reformand other credit union priorities off the legislative agenda forthe first fee months of the new Congress.

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