ICBA Supports Watt On Fannie Mae Comments

From the inbox regarding the latest in yet another twist in the Fannie Mae and Freddie Mac reform battle, this is a statement from The Independent Community Bankers of America or better known as ICBA on the matter:

net worth sweep Fannie Mae Freddie Mac

By User:AgnosticPreachersKid (Own work) [CC BY-SA 3.0], via Wikimedia Commons

Independent Community Bankers of America® (ICBA) President and CEO Camden R. Fine today issued the following statement on Federal Housing Finance Agency Director Mel Watt’s testimony before the Senate Banking Committee.

“ICBA strongly supports today’s testimony from FHFA Director Mel Watt regarding the need for Fannie Mae and Freddie Mac to retain their earnings and to start rebuilding their capital buffers. ICBA agrees that a Treasury draw by one or both government-sponsored enterprises could lead to unnecessary disruption in the market liquidity provided by the GSEs as well as other consequences that would harm community bank mortgage lenders and borrowers.

“ICBA continues urging Director Watt and Treasury Secretary Steven Mnuchin to end the Fannie and Freddie net-worth sweep and require the GSEs to develop and implement a plan to rebuild their capital, as required by the Housing and Economic Recovery Act of 2008. As stated in ICBA’s recent white paper detailing its principles and recommendations for reforming Fannie and Freddie, preserving equal access to the secondary market for lenders of all sizes will promote lending in local communities while offering an alternative to the largest and systemically riskiest financial institutions.

“ICBA looks forward to working with the FHFA, Treasury and Congress on comprehensive housing-finance reform.”

UPDATE: 5:34PM EST statement from another organization

Civil and Human Rights Coalition Applauds FHFA Director Mel Watt for Calling to Strengthen Fannie, Freddie Finances

WASHINGTON— Wade Henderson, president and CEO of The Leadership Conference on Civil and Human Rights, issued the following statement regarding Federal Housing Finance Agency Director Mel Watt’s testimony today before the Senate Banking Committee:

“We commend Director Watt for voicing strong concerns about a five-year-old policy that threatens the financial stability of the mortgage giants Fannie Mae and Freddie Mac. The 2012 decision to reduce Fannie’s and Freddie’s capital to zero, by the end of this year, threatens longstanding efforts to make housing finance accessible and affordable to more people. This policy was created before Director Watt was appointed and has been kept in place by pressure from the administration and Congress, but it makes no sense to continue it. Keeping this policy in place poses a serious risk to the health of the current housing finance system, and does absolutely nothing to put us on the legislative path to a better system. Congress should heed Director Watt’s warning and support his continued efforts to protect taxpayers and to operate Fannie and Freddie in a sound and responsible manner.”