The National Association of Federally-insured Credit Unions (NAFCU) has issued a letter of support to U.S. Reps. Mark Sanford, R-South Carolina, and Brad Sherman, D-California, after they reintroduced H.R. 916—also known as the Risk Management and Homeowner Stability Act of 2017—earlier this week.
The bill, which would amend the Congressional Budget Control Act of 1974 and effectively prohibit the use of guarantee fees (g-fees) for spending in unrelated federal programs, was originally proposed back in 2016, though it was ultimately unsuccessful. The bill’s original sponsors, Sanford and Sherman, brought it back to the floor on Tuesday.
After the reintroduction, Brad Thaler, NAFCU Vice President of Legislative Affairs, quickly penned a letter of thanks to the representatives, noting the NAFCU’s longtime support of ending g-fee hikes and spending.
“NAFCU has long urged lawmakers not to use Fannie Mae and Freddie Mac’s credit risk g-fees as a funding offset,’ the NAFCU’s website reads. “The association has consistently advised against raising g-fees, which would raise borrower costs and could put a damper on lending.”
In his letter, Thaler described the inherent risks of using g-fees in federal spending.
“Guarantee-fees (g-fees) are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty mortgages,” Thaler wrote. “Increasing g-fees for any purpose other than risk mitigation effectively acts as a tax on the purchase or refinance of a home, while also exposing the taxpayer to additional risk. Your legislation will stop the practice of using g-fees as a pay-for and help keep the cost of homeownership down for the American people.”
He continued by saying, “NAFCU and our members thank you for your leadership on this important issue.”
Read Thaler’s full letter on behalf of the NAFCU at NAFCU.org.