For Immediate Release
July 20, 2017
ABA Media Contact: Jeff Sigmund
(202) 663-5439
Email: jsigmund@aba.com
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ABA Testifies on Need for GSE Reform

​WASHINGTON — The American Bankers Association outlined a set of key principles that should guide GSE reform, and explained why legislation is critical to maintaining access for community banks in testimony before the Senate Banking Committee today.

Brenda Hughes, senior vice president and director of mortgage and retail lending for First Federal Savings of Twin Falls, Idaho, testified on behalf of ABA.  Hughes emphasized that an explicit, fully-priced, fully-paid-for federal guarantee for a targeted portion of the mortgage market will serve as a catalyst for broader market growth and development.
 
“These legislative reforms are critical,” Hughes said. “Congress should not defer action any longer. Nine years of conservatorship is more than enough.”
 
GSE reform and community bank access are critical issues affecting our country, as Americans have relied on long-term, fixed-rate mortgages for 70 years. Hughes noted that Fannie Mae and Freddie Mac have facilitated access to this product by providing access to the capital markets for primary market lenders.
 
“Absent aggregation and securitization, access to long-term, lower-rate funding would be far more difficult to come by for most primary lenders,” Hughes said.  “The government guarantee provided to mortgage-backed securities guaranteed by the GSEs makes them more attractive to the capital markets, ensuring liquidity.  As we consider reform, these elements must be preserved and remain available to all primary market participants regardless of size or location.”
 
Hughes outlined ABA’s principles on GSE reform, developed with input from bankers at institutions of all sizes across the country, and fully detailed in her written testimony.  She testified that these principles should form the basis for legislative reform efforts.
 
“Guided by these key principles, we believe that relatively tailored legislation that takes a surgical approach to making necessary alterations to the current system is both desirable and achievable,” Hughes said.  
 
For a copy of Hughes’ full written testimony, please click here.
 
The American Bankers Association is the voice of the nation’s $17 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $13 trillion in deposits and extend more than $9 trillion in loans.
 
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