ABA Statement for the Record to the House Financial Services Committee on FHFA Oversight

The American Bankers Association (ABA) appreciates the opportunity to provide a Statement for the Record for this hearing, FHFA Oversight: Protecting Homeowners and Taxpayers. ABA is the voice of the nation's $23.6 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $19.2 trillion in deposits and extend $12.2 trillion in loans.

We appreciate this committee's attention to the important issues facing our nation's mortgage markets and the vital role that the Federal Housing Finance Agency (FHFA) plays as the regulator of Fannie Mae, Freddie Mac (the Enterprises or GSEs) and the Federal Home Loan Banks and as conservator of Fannie Mae and Freddie Mac since 2008.

Our comments today focus on the following points: the need for Congress to end the conservatorships of the GSEs; FHFA's comprehensive review of the Federal Home Loan Banks; FHFA’s efforts to address appraisal bias; and FHFA’s role in assisting the industry in loss mitigation and loan servicing in light of the COVID 19 pandemic.

I. Principles for GSE Reform

FHFA, under multiple Administrations, has worked diligently and effectively to build a reliable capital framework and to erect guardrails to ensure that Fannie Mae and Freddie Mac operate in a safe and sound manor while fulfilling their statutory mission. We believe it is now time for Congress to end the conservatorships and adopt necessary reforms through legislation.

The ABA, through input and deliberation from banks of all sizes and from all parts of the country, has developed a set of principles to guide the reform of Fannie Mae and Freddie Mac. While these principles have previously been shared with Congress, they have been updated to reflect key changes that have taken place in the mortgage markets and adjustments to the conservatorships, including the end of the "sweep" of GSE profits to the Treasury.

Download the Statement for the Record to read the full text.