Legislation Seeks To
Privatize Secondary Market
WASHINGTON-Bolstered by exploding losses at Fannie Mae and Freddie Mac, Sen. Robert Corker (R-TN) introduced legislation last week that would privatize the secondary mortgage market and end government guarantees on mortgages and mortgage backed securities.
Corker's bill comes days after Fannie Mae and Freddie Mac, under federal conservatorship since September 2008, reported additional $14 billion of losses for the third quarter and increased their need for taxpayer assistance to more than $160 billion.
The bill, similar to efforts being undertaken in the House, would sell off all systems and technology owned by Fannie and Freddie to private investors and gradually eliminate the government guarantee on mortgage backed securities issued by the two secondary mortgage giants, which now back a staggering 90% of all new single family home loans.
The privatization of the secondary mortgage market has been keenly opposed by credit unions which rely on Fannie and Freddie to buy more than half of their mortgages and to guarantee the MBS they buy with surplus credit union funds. Corker's proposal would create a uniform legal structure for MBSs, which would be regulated by the Federal Housing Finance Agency. Under the bill all borrowers would need a 5% downpayment and full documentation to qualify for a loan.
NCUA Projects Assessment
To Be In 8-11 BP Range
ALEXANDRIA, Va.-NCUA last week said it is projecting the 2012 corporate credit union assessment will be well below the 2011 assessment of 25 basis points, and is more likely to be in the 8-11 BP range. NCUA Chairman Debbie Matz also confirmed that for the first time in three years there will be no NCUSIF premium in 2011, but that the premium may need to be charged again in 2012. The agency is also projecting its spending increase will be in the "single digits" in 2012.
NCUA Nominee Hearing Nov. 17
WASHINGTON-The Senate Banking Committee has scheduled a confirmation hearing on NCUA Board nominee Carla Leon-Decker for Nov. 17, a committee aide confirmed to Credit Union Journal.
Leon-Decker, president of the $47 million D.C. Government Employees FCU, would be the second Democrat on the three-member panel, succeeding Gigi Hyland, whose six-year term on the Board expired in August. If endorsed by the Senate Banking Committee the nomination must be approved by the full Senate.
CFPB To Offer 'Heads Up'
WASHINGTON-The Consumer Financial Protection Bureau last week indicated it will give financial institutions a heads up when they face possible enforcement actions. The early warning notice would give the subject of any investigation-including individuals and institutions -an opportunity to respond to allegations before the bureau decides whether to take legal action.
"The early warning notice announced today strikes a balance between the goal of fairness to those being investigated and our mission to protect consumers," Raj Date, the bureau's interim leader, said in a press release. "This process will help us fulfill our commitment to transparency in enforcing the law."
Under its own early warning process, the CFPB will notify firms or individuals that evidence gathered in an investigation indicates that they have violated consumer financial laws. They then have 14 days to respond in writing, including any relevant legal or policy arguments or facts, according to the press release.
Former NY Leader, Gordon, Dies
ALBANY, N.Y.-Berris R. Gordon, 90, the former president of the Credit Union Association of New York, has died. Gordon joined what was then known as the New York State Credit Un ion League in 1964 as a field representative and by 1978 had worked his wa up to president. He retired in 1984.
