The Independent Community Bankers of America (ICBA) has become the latest trade group to offer a white paper
offering a strategy to resolve the future of the government-sponsored enterprises (GSEs).
In its white paper
, the ICBA proposes that the federal government allow the GSEs to rebuild their capital buffers while reducing the risks posed to the GSEs by credit-risk transfers. The white paper also envisions the Federal Housing Finance Agency ending the GSEs’ net-worth sweep while establishing capital-restoration plans, and delaying the launch of its Uniform Mortgage Backed Security until the GSEs are recapitalized and released from conservatorship. It also seeks a new catastrophic mortgage insurance fund for GSE securities and changing the GSEs into regulated and shareholder-owned financial utilities.
“Community banks depend on Fannie Mae and Freddie Mac for direct access to the secondary mortgage market, which promotes lending in local communities and offers an alternative to the largest and riskiest financial institutions,” said ICBA President and CEO Camden R. Fine. “ICBA and the nation’s community bankers urge Congress and the Trump administration to end the destructive sweep of the GSEs’ earnings directly to government coffers, put the GSEs on sound financial footing, support equitable access to the housing-finance system, and protect taxpayers from another housing crisis.”