Fannie Mae & Freddie Mac: Civil And Human Rights Coalition Responds To Mortgage Bankers’ Letter Defending Housing Finance Status Quo
WASHINGTON – Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights, issued the following statement in response to a letter from the Mortgage Bankers Association and four other trade associations to Federal Housing Finance Agency Director Mel Watt. The letter urges Director Watt to withhold making any changes to the current financial agreements with Fannie Mae and Freddie Mac, and instead wait for this Congress to pass comprehensive housing finance reform:
“We were hoping that the June 8 letter to FHFA Director Mel Watt by five trade associations might shed some light on the Treasury Department’s 2012 decision to eliminate the capital ‘buffers’ of Fannie Mae and Freddie Mac. One of the most important financial reforms after 2008 was to require companies to hold greater levels of capital, yet Treasury inexplicably decided to go completely in the opposite direction with two of the largest financial companies in the world – which is why we have joined with other civil rights advocates, trade associations, dozens of members of Congress, and FHFA Director Mel Watt himself in expressing concerns.
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The only justification this letter offers for the policy is that it will ‘provide an adequate backstop to allow Congress to complete’ legislation. In other words, the goal is to allow a financial crisis for the first time since 2008 in the hope that Congress – yes, this Congress – will somehow manage to pass bipartisan, highly-complicated legislation to create a brand new and untested mortgage finance system. The fact that Treasury and these organizations support playing chicken with our economy is nothing short of frightening – and the fact that they would publicly admit to this is truly astonishing.
Meanwhile, large numbers of low- and middle-income families continue to be shut out of the housing market, unable to rebuild the wealth and financial security that the Great Recession decimated. There is still time to heed Director Watt’s warning and to act to strengthen the pathway to homeownership. Advocating for the status quo is irresponsible.”
Wade Henderson is the president and CEO of The Leadership Conference on Civil and Human Rights, a coalition charged by its diverse membership of more than 200 national organizations to promote and protect the rights of all persons in the United States. The Leadership Conference works toward an America as good as its ideals. For more information on The Leadership Conference and its 200-plus member organizations, visit www.civilrights.org.
Fannie Mae & Freddie Mac