Congress Returns to Work, Faces Difficult Decisions
July 5, 2011
July 5, 2011
The House returns from recess this week. The Senate will return as well, cancelling a scheduled recess to deal with the debt ceiling after the White House warned that failure to act on the issue before August 2 the government could default on its debt payments and be forced to withhold payments like Social Security checks to retirees.
The Senate Banking Committee last week held a hearing on housing finance reform. Credit unions were represented by Rod Staatz, president & CEO of SECU of Maryland, who testified that any changes to the U.S. housing finance system must ensure that credit unions and other small issuers maintain fair and affordable access to secondary mortgage markets. Oregon’s Senator Merkley, a member of the Committee, attended the hearing after reaching out to the Northwest Credit Union Association (NWCUA) to get his own credit union perspective. The Association shared some concerns with the Senator, including the following:
- While we agree that reform is necessary, one consistent concern is that the secondary market will be controlled by just a few very large banks. We feel this could hamper credit unions’ access to the market and increase pricing as we try to compete with the larger institutions.
- Additionally, many credit unions choose to service their own loans, as that allows them to keep a strong relationship with their members. We want to ensure that this option is not jeopardized if large banks control the market.
- Finally, credit unions hope to see strong oversight and appropriate regulation of a secondary market to protect both the institution and the consumer and equal access for lenders of all sizes.
The committee hearing schedule is fairly light this week. We are tracking a couple committees of interest. On Thursday, the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit and Subcommittee on Oversight and Investigations will hold a joint hearing on “Mortgage Servicing: An Examination of the Role of Federal Regulators in Settlement Negotiations and the Future of Mortgage Servicing Standards.”
The House Financial Services Committee Subcommittee on Financial Institutions and Consumer Credit will hold a hearing Friday entitled, “Legislative Proposals Regarding Bank Examination Practices.” This hearing will focus on two bills: H.R. 1723, the “Common Sense Economic Recovery Act,” which would permit certain loans that would otherwise be treated as non-accrual loans to be treated as accrual loans; and H.R. 2056, a bill to instruct the FDIC Inspector General to study the impact on insured depository institutions failures.
Questions? Contact a member of the Association’s Legislative Affairs team: