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PRESS RELEASE

For Immediate Release
Contact: Keosha Burns, (202) 589-2427

Statement on Comprehensive Housing Legislation and Treasury Department Initiative on housing GSEs

Washington, D.C. – July 16, 2008 – The Financial Services Roundtable and its Housing Policy Council urge Congress to complete final passage of the Housing and Economic Recovery Act of 2008. This legislation contains GSE regulatory reform; FHA modernization and an FHA refinance program which are critical components in the effort to stabilize and strengthen the housing finance system for American homeowners.

In addition, we support the Treasury Department and Federal Reserve’s most recent steps to extend additional temporary support to the housing GSEs at a difficult time in the financial markets. These are necessary temporary measures which will ensure that the GSEs have the liquidity and capital to play their important and appropriate role in the secondary mortgage market. We support Congress including the Treasury Department’s initiative as part of the final version of the Housing and Economic Recovery Act and support the efforts of Congressional leaders to complete action on the comprehensive housing legislation to enact GSE and FHA reforms as soon as possible.

The Financial Services Roundtable and its Housing Policy Council have consistently supported enactment of legislation to strengthen the regulatory structure of the housing Government Sponsored Enterprises. Congress has worked on GSE reform for over five years and enactment is vitally needed and long overdue.

The bill contains the essential components needed to strengthen the regulation of the housing-GSEs. The legislation would create a new, independent regulator for the GSEs with clear authority to oversee the safety and soundness, capital standards and products of the GSEs. This improved regulatory structure will help stabilize the housing finance system and begin to restore confidence and liquidity to the market which will benefit consumers and the overall economy.

In addition, the bill contains FHA modernization reforms and a temporary FHA refinance program for at-risk homeowners. FHA modernization is essential for that agency to play its proper role in assisting low and moderate income homeowners, and the refinance program would provide an additional option to help at-risk homeowners stay in their homes.

Secretary Paulson’s initiative would provide additional stability to the financial markets. The Treasury Department proposal would give the Department and the Federal Reserve the authority to provide additional temporary support to the GSEs if necessary. In addition, it would provide a larger on-going role for the Federal Reserve in working with the new GSE regulator to assure the safety and soundness and prudential operation of the GSEs. This step would help protect against risk to the housing finance system by enabling the Federal Reserve to work closely with the new regulator to ensure the prudential operation of the GSEs going forward.

Chairman Frank, Chairman Dodd, Senator Shelby and their Committees have brought years of work toward a stronger GSE regulatory system to this important point, as well as needed steps to improve the role of FHA. The comprehensive housing legislation contains the essential reforms needed to strengthen the oversight of the GSEs and to enhance the effectiveness of FHA. This legislation is needed now. The Treasury Department’s proposal would provide additional temporary support and oversight to the GSEs at an uncertain time in the markets. We support its inclusion in the housing legislation. The Administration and Congress have made tremendous progress in working together to address these critical housing and mortgage market issues. We urge them to complete their work. It will benefit American homeowners and the nation’s economy now and in the future.

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The Financial Services Roundtable represents 100 of the largest integrated financial services companies providing banking, insurance, and investment products and services to the American consumer. Member companies participate through the Chief Executive Officer and other senior executives nominated by the CEO.

Roundtable member companies provide fuel for America's economic engine, accounting directly for $66.1 trillion in managed assets, $1.1 trillion in revenue, and 2.5 million jobs.

The Roundtable and the Housing Policy Council have partnered with other industry leaders to form HOPE NOW. HOPE NOW is an alliance between counselors, mortgage market participants, and mortgage servicers to create a unified, coordinated plan to reach and help as many homeowners as possible.