Credit Union Journal: Cheat sheet: Crapo plan reasserts Capitol Hill’s role in GSE reform

Credit Union Journal, February 1st, 2019: Cheat sheet: Crapo plan reasserts Capitol Hill’s role in GSE reform

WASHINGTON — Just as the Trump administration appears focused on releasing a framework to overhaul the housing finance system, Senate Banking Committee Chairman Mike Crapo on Friday signaled Congress wants to reassert its role in the reform effort.

The legislative outline released by the Idaho Republican is another stab by lawmakers to reform the government-sponsored enterprises following a string of failed attempts. Crapo’s latest plan also shifts some attention away from whatever administrative overhaul the White House and acting Federal Housing Finance Agency Director Joseph Otting are readying without Congress.

“In our view, a role for Congress is critical to effectuate these important changes,” Michael Bright, the president and CEO of the Structured Finance Industry Group and a former acting president of Ginnie Mae, said in a letter to Crapo supporting his plan.

Otting has reportedly said the administration may unveil a plan in the coming weeks possibly to end the conservatorships of Fannie Mae and Freddie Mac. But Crapo’s plan focuses on more comprehensive structural changes to the housing finance system, which require legislation.

Crapo’s framework suggests turning Fannie and Freddie into private guarantors while allowing for other private guarantors to compete with the mortgage giants, using Ginnie Mae to provide a government backstop.

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