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In response to the Federal Housing Finance Agency's (FHFA) proposed rule that would require the government-sponsored enterprises (GSEs) – Fannie Mae and Freddie Mac – to obtain prior approval on new products and activities, NAFCU urged the agency to consider the potential impacts on access to credit for low- and moderate-income borrowers during its review.

As proposed, the rule would establish criteria for determining whether a new activity requires notice to the FHFA and if the activity merits public notice and comment, as well as implement section 1321 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.

"NAFCU supports a vibrant housing finance market that encourages innovation and competition," wrote Aminah Moore, NAFCU's regulatory affairs counsel.  "However, innovation through new products and activities should not create risks that jeopardize the stability of the housing market, reduce credit union access to the secondary market, and put taxpayers on the hook in the event of an economic downturn."

Moore reiterated that the association and its member credit unions are opposed to removing the GSEs from conservatorship "without strong capital reserves and certain legislative guarantees to ensure equal access and pricing for credit unions."

In the letter, Moore also shared suggestions for the FHFA to improve efficiency for the GSEs and support technological innovation in the housing market, including:

• applying the exclusion for the automated underwriting systems as set forth in the Safety and Soundness Act directly to the related but independent underwriting systems and to future technology systems;
• consider the effect on cost of housing for low-income and moderate-income borrowers when the GSEs undertake new activities and products; and
• include other factors like the degree to which the new product allows or disallows low- and moderate-income consumers to obtain mortgage loans when looking at whether a new product is in the public interest and prior to approval of a new product or activity.

NAFCU will continue to work with the FHFA on any housing finance reform-related efforts and to ensure credit unions’ concerns are addressed as they work to meet the needs of their members during the pandemic.