NAFCU flags liquidity concerns for FHFA

As the Federal Housing Finance Agency (FHFA) considers minimum liquidity and funding requirements for the government-sponsored enterprises (GSEs), NAFCU’s Ann Kossachev urged the agency “to thoroughly consider the impact of this liquidity requirements rule on the cost and availability of mortgage loans for the most vulnerable consumers.”

The FHFA issued the proposed rule in December, which would also create daily management reporting of the GSEs’ liquidity positions monthly public disclosure reporting requirements, and more. FHFA Director Dr. Mark Calabria indicated the rule is part of a combined effort with the GSEs’ capital rule to ensure the enterprises are well-positioned to survive times of stress with limited impact on consumers and the housing market.

Kossachev, NAFCU’s director of regulatory affairs, reiterated NAFCU’s support for the GSEs to rebuild capital and be in safe, sound financial condition before exiting conservatorship. However, “it is critical that any regulatory changes during this process do not impinge on credit unions’ ability to offer affordable mortgage loans to their members and sell their mortgage loans to the GSEs at a fair and reasonable price.”

A concern for the association is the large role non-bank mortgage servicers play in the housing market and their risk of liquidity shortfalls. To ensure the health of the mortgage market amid the coronavirus pandemic and beyond, Kossachev also called on the FHFA to strengthen financial eligibility requirements for non-bank mortgage servicers and ensure transparency and proper oversight in its efforts, which is a component of the association’s fight for a level playing field between credit unions and non-traditional financial institutions.

 

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