Chairman Crapo, Ranking Member Brown and Members of the Committee, the American Bankers Association (ABA) is pleased to submit this statement for the record on the important topic of Government Sponsored Enterprise (GSE) reform and bank access to the secondary market. The ABA is the voice of the nation’s $17 trillion banking industry, which is composed of small, mid-size, 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.
We appreciate the work this committee has done thus far to refine proposals for GSE reform and the further efforts undertaken by the Administrations to move reform forward. 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, which, as you know, have been in conservatorship for over a decade. These principles that should form the basis for legislative reform efforts, many of which are reflected in the Treasury report. We will withhold detailed comments on the Treasury’s Reform Plan pending further review, analysis and feedback from our members, but we do commend the Administration for moving the process forward with this report. The report provides both legislative and administrative recommendations for reform and recognizes that legislative action is necessary in order to lock in durable reforms to the government’s role in the secondary mortgage market – a point with which we strongly agree.
Below, we share again our principles for reform, along with initial commentary on how the Treasury report reflects or differs from those principles.
