Short-term highway fix clears, omits NAFCU-opposed g-fee use

Capitol Dome

July 31, 2015

The Senate, voting 91-4, on Thursday cleared a short-term highway bill that – as strongly urged by NAFCU – eliminates the use of Fannie Mae and Freddie Mac guarantee fees (g-fees) from offsetting revenue provisions.

These credit-risk g-fees are used to offset costs incurred by the government-sponsored enterprises when foreclosures occur.

“We’re gratified that lawmakers have kept g-fees out of highway funding, for now, but we’ll be closely monitoring the long-term funding measure that lawmakers are expected to try to resolve in the fall,” said Carrie Hunt, NAFCU’s senior vice president of government affairs and general counsel.

NAFCU has long been on record opposing the use of g-fees to pay for unrelated federal programs, and it weighed in anew last week in a letter with 12 other financial and housing industry trades. “Increasing g-fees for other purposes – even just extending the current fee increase for four years – effectively taxes potential homebuyers and consumers looking to refinance their mortgages,” the groups wrote.

The highway bill does contain one provision affecting financial institutions: A requirement that lenders report more information to the IRS on outstanding mortgages to IRS. This requirement, according to its authors, purportedly would generate some $1.81 billion by reducing inaccurate reporting. NAFCU will continue to urge its repeal before it takes effect at the end of 2016.

 

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