JOHNSON OPENING STATEMENT ON PUBLIC PROPOSALS FOR HOUSING FINANCE REFORM HEARING

WASHINGTON – Today, Senate Banking Committee Chairman Tim Johnson (D-SD) held a hearing entitled “Public Proposals for the Future of the Housing Finance System.” The hearing was part of the Committee’s ongoing discussion regarding the future of the American housing finance system. 

 

“As we begin this hearing, I am reminded of the former Chairman’s farewell speech on the Senate floor.  He challenged Senators to rise to the expectations of the American people and work towards consensus to address the difficult times facing families across our nation.  While mortgage credit continues to be available, it is almost exclusively through Fannie Mae, Freddie Mac and the FHA.  Maintaining the housing finance system in this way is not sustainable for the long term. 

 

“Reforming our housing finance system will require the kind of hard work and consensus building that the Senate is known for.  This endeavor can only be accomplished through passionate but civil debate.  To help us frame that debate, we have four witnesses before us today with proposals for the future structure of the housing finance system.

 

“I would like to thank each of you for being here today and for taking the time to try and find a path forward for the nation’s housing market.  I was pleased to see that all your plans considered how changes might affect the cost and availability of mortgage credit to qualified families.  These are complex issues with real consequences and it is understandable that reasonable people will disagree about the path forward.  While disagreement can help further our understanding of the potential impact of changes, we are not here to simply attack each other’s ideas.  I hope that in the great tradition of this body we can disagree without being disagreeable.

 

“The Committee’s first hearing on this topic was a constructive discussion about the options for the future, and I hope we can continue that discussion today.  At that time and in the Committee agenda that I released in February, I raised several points for consideration. These included preserving the 30-year fixed-rate mortgage, ensuring that community banks continue to have equal access to the secondary market, protecting the availability of affordable housing, and safeguarding taxpayer dollars.  I look forward to hearing from our witnesses about how each of their plans addresses these points.

 

“Before I conclude my statement, I would like to note that the FDIC is considering the proposed QRM definition as required by the Dodd-Frank Act.  Like other rulemakings, there will be a comment period before the definition is finalized.  I would encourage extensive and thoughtful public comments about the proposed rule to ensure that all sides are heard.” 

 

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