ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release September 12, 2000 #00-103
E-mail: [email protected]

AMERICA’S COMMUNITY BANKERS SUPPORTS BAKER INITIATIVE TO IMPROVE OVERSIGHT OF FANNIE MAE, FREDDIE MAC

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WASHINGTON, D.C. — America’s Community Bankers said today that it supports the initiative of Rep. Richard Baker (R-La.) to improve government oversight of Fannie Mae and Freddie Mac, but recommended against consolidating the regulation of the two companies with that of the Federal Home Loan Bank System.

Participating in a roundtable discussion on Baker’s bill, F. Weller Meyer, chairman of ACB’s Government Sponsored Enterprises Task Force said: “ACB believes that H.R. 3703 is an important and timely legislative initiative and raises public policy issues that must be addressed.” Meyer is also president and CEO, Acacia Federal Savings Bank, Falls Church, Va.

Meyer said ACB supported consolidating the mission and safety and soundness regulation of Fannie and Freddie into a single government regulatory agency. He said ACB strongly supports adding language to clearly define the mission of Fannie and Freddie and the dividing line between primary and secondary market activities.

Meyer said regulation of the FHLBank System should not be consolidated with the regulation of Fannie Mae and Freddie Mac because the Bank System is a cooperative system, while Fannie and Freddie are publicly traded companies that require separate and different regulation. Similarly, he urged risk-based capital standards that are consistent with the different nature of the financial structures of the FHLBank System and Fannie and Freddie.

Meyer said that ACB supports consideration of adjustments to the process for reviewing and approving new programs and activities proposed by Fannie and Freddie. He opposed the expansion of Fannie and Freddie into the market for home equity lines of credit and other similar programs. Meyer urged that the bill require regulators to condition approval of new activities on giving all GSE seller/servicers access at competitive prices and terms.

Meyer cautioned against repealing the GSEs’ lines of credit with the Treasury Department. He said that eliminating the lines of credit “could be expected to increase residential mortgage credit costs and reduce the value of current portfolios of GSE securities and debt instruments. Careful review of the cost balanced against any benefits of a repeal should be considered before such action is approved.”

Meyer also opposed elimination of the FHLBanks’ super-lien authority. He supported the bill’s sense of Congress provision that urges federal banking regulators to treat privately issued mortgage backed securities for risk-based capital purposes the same as those issued by the GSEs.

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America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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