ABA Banking Journal - May 2011 - (Page 6)

ABA ChAirmAn’s view | by steve wilson Shrink U.S. role in home finance Housing is a fundamental part of the American economy. A stronger, more vibrant housing market would promote job creation, strengthen the economy, and create new demand for mortgages. It may take time to get there, but the nation is launched on an effort to create a new housing finance policy, and ABA is playing a critical role in its development. ABA’s proposal was developed with hands-on input from community and regional banks and some of the largest banks in the country. It bears the imprint of our GSE Policy Committee and was endorsed by our Board of Directors. It focuses on three broad policy questions: 1. What is the end point? ABA believes the federal government’s role in housing finance should be dramatically reduced from its current level, and a private market for the vast majority of housing finance should be encouraged. That’s particularly true for conventional loans. The ultimate goal is to limit government’s role to ensuring stability and accessibility of the capital markets in the event of a market failure. ABA is seeking a well-regulated private market that can finance housing for borrowers whose income and credit rating qualify them for conventional financing. We support a continued federal guarantee for existing GSE debt and securities to ensure stability. And government involvement may be necessary for the affordable rental market and to assist first-time borrowers. 2. How do we get to that point? ABA is recommending that the 6  |  ABA BANKING JOURNAL  |  May 2011 primary mechanism for reducing government involvement, and for compensating the government for its ongoing support, is an increase in the guarantee fees (G fees) to reflect the true value of the federal guarantee. That would help offset the costs of the Fannie Mae and Freddie Mac conservatorship and promote the reentry of the private sector in the mortgage market by making private securitizations more competitive. At the same time, conforming loan limits should be lowered to help reestablish private securitizations for loans above those limits. 3. How might costs be mitigated? ABA has offered several ideas, including using G-fees to absorb losses from bad assets. These are spelled out in a letter to Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan (http://tinyurl.com/abaGSEletter). The Obama administration and the Congress have put forward their own ideas. The administration’s proposal includes many elements that are consistent with ABA’s plan. And ABA’s plan is broadly consistent with plans outlined by the House leadership. ABA will work with the administration and the Congress to find a bipartisan solution to housing reform that will develop private sector alternatives, wind down the investment portfolios of Fannie Mae and Freddie Mac, and return the Federal Housing Administration to its traditional role. If our efforts help promote a stronger housing market and a smaller role for government, we will have done our job well. n “ABA is seeking a wellregulated private market … for borrowers who qualify for conventional financing” — Stephen P. Wilson, Chairman and CEO, LCNB National Bank, Lebanon, Ohio http://www.aba.com/aba/documents/press/ABAGSEKeatingLetterdocFINAL(2).pdf

Table of Contents for the Digital Edition of ABA Banking Journal - May 2011

ABA Banking Journal - May 2011
Contents
Chairman’s View
Editor’s Column
The Economy
Bank Notes
ABA Community Banking: Getting in on the Prepaid Wave
Pass the Aspirin
Tech Topics
Cover Story: #5 and Feeling Good
Smartphones Alter Banking Landscape
Compliance Clinic
Compliance Inbox
ABA Resources
Surveys & Trends
Board Matters
First Person

ABA Banking Journal - May 2011

https://www.nxtbook.com/naylor/BAKS/BAKS0515
https://www.nxtbook.com/naylor/BAKS/BAKS0415
https://www.nxtbook.com/naylor/BAKS/BAKS0315
https://www.nxtbook.com/naylor/BAKS2/BAKS1014
https://www.nxtbook.com/naylor/BAKS2/BAKS0914
https://www.nxtbook.com/naylor/BAKS2/BAKS0814
https://www.nxtbook.com/naylor/BAKS2/BAKS0714
https://www.nxtbook.com/naylor/BAKS2/BAKS0614
https://www.nxtbook.com/naylor/BAKS2/BAKS0514
https://www.nxtbook.com/naylor/BAKS2/BAKS0414
https://www.nxtbook.com/naylor/BAKS2/BAKS0314
https://www.nxtbook.com/naylor/BAKS2/BAKS0214
https://www.nxtbook.com/naylor/BAKS2/BAKS0114
https://www.nxtbook.com/naylor/BAKS2/BAKS1213
https://www.nxtbook.com/naylor/BAKS2/BAKS1113
https://www.nxtbook.com/naylor/BAKS2/BAKS1013
https://www.nxtbook.com/naylor/BAKS2/BAKS0913
https://www.nxtbook.com/naylor/BAKS2/BAKS0813
https://www.nxtbook.com/naylor/BAKS2/BAKS0713
https://www.nxtbook.com/naylor/BAKS2/BAKS0613
https://www.nxtbook.com/naylor/BAKS2/BAKS0513
https://www.nxtbook.com/naylor/BAKS2/BAKS0413
https://www.nxtbook.com/naylor/BAKS2/BAKS0313
https://www.nxtbook.com/naylor/BAKS2/BAKS0213
https://www.nxtbook.com/naylor/BAKS2/BAKS0113
https://www.nxtbook.com/naylor/BAKS2/BAKS1212
https://www.nxtbook.com/naylor/BAKS2/BAKS1112
https://www.nxtbook.com/naylor/BAKS2/BAKS1012
https://www.nxtbook.com/naylor/BAKS2/BAKS0912
https://www.nxtbook.com/naylor/BAKS2/BAKS0712
https://www.nxtbook.com/naylor/BAKS2/BAKS0612
https://www.nxtbook.com/naylor/BAKS2/BAKS0512
https://www.nxtbook.com/naylor/BAKS2/BAKS0412
https://www.nxtbook.com/naylor/BAKS2/BAKS0312
https://www.nxtbook.com/naylor/BAKS2/BAKS0212
https://www.nxtbook.com/naylor/BAKS2/BAKS0112
https://www.nxtbook.com/naylor/BAKS2/BAKS1211
https://www.nxtbook.com/naylor/BAKS2/BAKS1111
https://www.nxtbook.com/naylor/BAKS2/BAKS1011
https://www.nxtbook.com/naylor/BAKS2/BAKS0911
https://www.nxtbook.com/naylor/BAKS2/BAKS0811
https://www.nxtbook.com/naylor/BAKS2/BAKS0711
https://www.nxtbook.com/naylor/BAKS2/BAKS0611
https://www.nxtbook.com/naylor/BAKS2/BAKS0511
https://www.nxtbook.com/naylor/BAKS2/BAKS0411
https://www.nxtbook.com/naylor/BAKS2/BAKS0311
https://www.nxtbook.com/naylor/BAKS2/BAKS0211
https://www.nxtbook.com/naylor/BAKS2/BAKS0111
https://www.nxtbook.com/naylor/BAKS2/BAKS1210
https://www.nxtbook.com/naylor/BAKS2/BAKS1110
https://www.nxtbook.com/naylor/BAKS2/BAKS1010
https://www.nxtbook.com/naylor/BAKS2/BAKS0910
https://www.nxtbook.com/naylor/BAKS2/BAKS0810
https://www.nxtbookmedia.com