Housing Finance Reform Should Now Focus on Fixing and Preserving Fannie Mae and Freddie Mac
- May 19, 2014
Huffington Post, May 19, 2014
May 19, 2014, By John Taylor
The sharply divided Senate Banking Committee vote on the Johnson-Crapo housing finance reform measure should serve as a clear signal that it is time for Congress to go back to the drawing board on plans for our system of housing finance. The Johnson-Crapo bill has serious problems for working Americans. If the bill in its current form became law, it would do enormous harm to homeownership opportunity. The bill must not be given a floor vote in the Senate.
There has been an ill-advised and misplaced push to get rid of Fannie Mae and Freddie Mac. Doing so would be a mistake. Fannie Mae and Freddie Mac have affordable housing goals, which help to make sure that the market serves underserved communities, and which have had a tremendous positive impact. The Johnson-Crapo bill eliminates the affordable housing goals and does not do enough to ensure that all creditworthy borrowers are able to access conventional mortgage credit. Among the bill’s problems: it would create a system where the regulator does not have meaningful authority to require institutions to serve all communities fairly. That is just one of several serious issues with the bill.