The Mortgage Bankers Association of America (MBA) testified this morning before the U.S. House of Representatives Financial Services Committee that it favored transferring regulatory oversight authority to the Dept. of the Treasury.
“MBA supports the administration’s proposal that the Department of the Treasury be given responsibility for safety and soundness regulation of the GSEs and that Treasury should have approval authority for new GSE programs and activities to ensure they are consistent with prudent financial management and sound business operations,” said John A. Courson, MBA chairman.
In A BMA release issued today, the MBA expressed support for the following core principles for effective regulation of the housing GSEs:
The Department of the Treasury should serve as the safety and soundness regulator of the GSEs.
The Department of Housing and Urban Development (HUD) should have authority to set and enforce appropriate affordable-housing goals for the GSEs.
Both the Treasury and HUD should have adequate funding to fulfill their mission, and should not be subject to either annual or permanent congressional appropriations. MBA recommends a funding arrangement similar to that of the Office of Thrift Supervision (OTS).
The safety and soundness regulator should have flexibility in setting capital standards to respond to changing marketplace conditions.
The regulator should have adequate enforcement authority to deter and correct any problems that may arise. MBA recommends enforcement tools - similar to those of the banking agencies - be applied.