By Peter Schroeder - 04/14/14 02:02 PM EDT
Interested parties are gearing up the message machine as the Senate Banking Committee prepares to consider a comprehensive housing finance reform bill.
A group of smaller financial institutions sent a letter to Chairman Tim Johnson (D-S.D.) and Sen. Mike Crapo (R-Idaho), the ranking Republican on the panel, airing concerns about what their housing overhaul would mean for the littler guys.
The joint letter from the Credit Union National Association, the National Association of Federal Credit Unions and the Independent Community Bankers of America comes as senators prepare to consider a bill many see as the best chance for a housing reform bill this Congress.
Also on Monday, a group called the Coalition for Mortgage Security launched a digital ad campaign in lawmakers’ home states criticizing Crapo for backing the bill, and praising Sen. Pat Toomey (R-Pa.), another committee member, for airing concerns about the measure.
As part of the $50,000 ad buy, ads in Crapo’s home state of Idaho criticize him for backing the “ObamaCare of housing.”
That group was formed only recently, and bills itself as grassroots and bipartisan. But it offers no information about who is backing it, and its arguments track closely with those being put forward by hedge funds and other investors who have a stake in Fannie Mae and Freddie Mac, which would be wound down under the Senate plan.
Ken Blackwell, who served as senior housing official under former President George H.W. Bush, is the group’s director.
Johnson and Crapo have scheduled a committee markup of their bill for April 29, after announcing the compromise bill in March. The two have vowed to push their bill forward, and the plan has received encouraging words from several major industry groups, and committee members on both sides of the aisle.
But the measure still faces an uphill climb in a divided Congress preparing for the fall elections, and House Republicans are still considering moving forward with their own bill as well. Both parties, as well as the White House, agreed that the current housing market, in which Fannie and Freddie dominate mortgage guarantees while on federal life support, is unsustainable. But coming up with a politically feasible path forward has proven difficult.
In their letter, the credit unions and community banks said the current market structure works well for them, and that a restructuring into “uncharted and untested” areas could put them at a disadvantage. They made several specific recommendations for changing the bill, with the broader idea of offering smaller institutions more flexibility or subjecting them to less rigorous standards than larger competitors.