Community Bankers of Iowa Monthly Banker Update May 2014 | Page 5

Fine Points
Written By: Camden Fine, President and CEO of ICBA

Getting GSE Reform Right
Like a fragile butterfly struggling free from
its cocoon, the politically intractable and
ideologically divisive issue of federal housing
finance reform is, once again, fluttering to
life in Washington this spring. After several
fits and starts and pullbacks, several new
legislative proposals are trying to take wing.
Congressional leaders and administration
officials are seriously focusing on federal
housing finance reform, to decide both
the future of Fannie Mae and Freddie
Mac—an unresolved policy issue from
the Wall Street financial crisis—and the
monumentally consequential question of the
right level of government involvement in the
secondary mortgage market. ICBA supports
comprehensive housing reform to draw private
capital back into the secondary market and
to protect taxpayers from future bailouts. But
it’s crucial that any reform, which will impact
20 percent of the nation’s economy, is not
simply done but done right.

Fortunately, because ICBA has been a
credible and constructive participant at the
discussion table from the beginning, any
final secondary mortgage market reform law
would have to be acceptable to the nation’s
community banks. Foremost at issue for ICBA
is maintaining an impartial secondary market
for all mortgage lenders. To ensure this, ICBA
has made it clear that any workable reform
legislation must follow these principles:
• allow community banks to sell loans
through an independent entity that does
not compete with community banks,
• do not appropriate community bank
customer data for cross-selling of
financial services,
• preserve the Federal !