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Federal Housing Finance Agency (FHFA) Director Mark Calabria Monday reaffirmed the agency's plans to end Fannie Mae and Freddie Mac's use of volume-based pricing discounts during remarks at an American Credit Union Mortgage Association conference. Last week, NAFCU's Government Affairs team learned that the agency had issued a directive making official its stance on fair pricing.

NAFCU has long advocated for credit unions' unfettered access to the secondary mortgage market with fair pricing. The association has shared this principle – and many more – with Calabria and others involved in housing finance reform several times.  Members of the association's senior staff and leaders from NAFCU-member credit unions previously met with  Calabria in June.

NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt shared the association's support for prohibiting volume-based discounts on pricing with the Senate Banking Committee during her testimony earlier this year.

The directive followed comments made by Calabria during NAFCU's Congressional Caucus earlier this month, which included further clarification on the GSEs' conservatorship and capital reserves.

"Fair pricing based on loan quality rather than quantity is a key component of NAFCU's housing finance reform principles, and we appreciate Dr. Calabria and the FHFA acknowledging the importance of ensuring this continues once Fannie Mae and Freddie Mac are removed from conservatorship," said NAFCU President and CEO Dan Berger in response to the directive. "Credit unions need access to liquidity, and consumers need access to affordable mortgages. This directive ensures this will continue."

According to Politico, during his speech Calabria discussed how the move is meant to "level the playing field" and how volume discounts distorted the housing market leading up to the 2008 financial crisis. He also noted that the agency plans to ensure the GSEs' compliance with the ban through regular reporting.

The Treasury Department recommended that the enterprises be "prohibited from offering volume-based pricing discounts or other incentives" to their lending in its recently released housing finance reform plan. The department also indicated that protections against volume-based discounts should be incorporated into the Preferred Stock Purchase Agreements.

NAFCU supports codifying guarantees on fair pricing and has long suggested legislative action to ensure credit unions receive guarantee fees based on the quality and not quantity of loans sold to the GSEs.

NAFCU will continue to monitor the FHFA's housing finance reform initiatives and keep credit unions updated via NAFCU Today.