Brown to Credit Unions: Housing Finance System Must Serve All Borrowers and Renters

Sen. Brown Delivers Housing Finance Speech at National Association of Federally-Insured Credit Unions Conference

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – delivered a speech at the National Association of Federally-Insured Credit Unions’ (NAFCU) Congressional Caucus Conference.

Sen. Brown’s remarks, as prepared for delivery, follow:

We need strong credit unions.

I’ve heard from many of you on the issues your credit unions face – from housing finance reform to cannabis banking to stronger data security.

I want to continue to work with you, so that you can continue to serve your members and communities with safe and affordable products and services—something too many financial institutions are unwilling to do.

Today I want to talk about housing – yesterday we had another hearing on housing in the Banking Committee.

I know you heard from Director Calabria this morning, about the housing finance reform plan the Administration put out last week. I want to talk about how I think about this issue.

Two books define how I think about housing:

First is Evicted.

Second is a book called the Color of Law, Richard Rothestein.

Most of you know that history – some of your credit unions were founded to fight lending discrimination.

Throughout history and still today, this country has systemically denied families of color the opportunity to choose where they live and build wealth through homeownership.

We also have an incredible wealth gap in this country, and housing costs are rising much faster than wages – another issue you all try to address every day.

That’s the context we need to think about when we talk about housing finance reform.

We have an affordable housing crisis in this country. I think everyone in this room knows that.

I see it when I talk to young people in their 20s and 30s who want to buy a home, but who graduated into the great recession, are drowning in debt, and can’t save enough for a down payment or afford a mortgage.

I see it when I drive past the boarded up houses that belonged to the victims of predatory lending in my neighborhood of Slavic Village, and so many like it across the country.

And you all see it in the conversations you have with your members.

We’ve had productive hearings in the Banking Committee this year, talking about what it would take for the housing finance system to actually work for working families. 

We’ve heard from a lot of stakeholders, including from Carrie at our March hearing.

We talked about how lender access to the system affects who can get a loan and at what price.

And we heard over and over that we need a system that serves all borrowers and renters, no matter who they are, what kind of work they do, or where they live.

Our goal has to be helping families afford a home and access the housing finance system.

But the Trump Administration plan would make mortgages more expensive and harder to get.

And one of the ways it would do that would be by making it harder for you to compete.

Credit unions need direct access to the secondary mortgage market on the same terms as the largest lenders, so you can provide the best, most affordable loans to your members.

And we need a secondary market that’s focused on providing housing at the best terms for families – not generating the highest possible returns for Wall Street.

This is the housing market, after all – so it should be about housing families, not unhousing them.

Smaller lenders like you are the ones that know your communities, you understand your local economies.

It’s why we need credit unions in this market. You have a duty to serve your members. You’re not only focused on the bottom-line.

But the administration’s plan is all about making it easier for Wall Street to make more money off working families’ mortgages, in part by eliminating the competition.

We know what will happen if we cede the entire housing market to Wall Street – look at 2008.

It wasn’t credit unions that came up with a system that preyed on families so that Wall Street investors could make a quick buck. That’s not part of your business model.

Risky Wall Street betting on predatory loans and toxic securities crashed the economy, and now they want to control the entire market.

We know the Trump Administration plan would make it much harder for you to issue mortgages and compete with the biggest lenders.

And you are already facing enough competition from big banks, tech companies, and shadow banks that provide financial services without a stake in their local communities.

We can’t let Wall Street get its way again, and drown out your voices.

All of you speak for your communities. You speak for your members.

Tell your stories.

You’re the ones sitting down with families, talking through their finances, helping them figure out what they can afford, helping them budget for a down payment.

You know the challenges these families face.

During this debate, Congress needs to hear that – they need to hear these stories.

You’ve already contributed to this conversation – thank you. But we can’t let up now.

So many decisions come down to whose side you’re on.

Are you on the side of your members, of struggling homeowners trying to make their payments, and hardworking families trying to own their first home?

Or are you on the side of Wall Street megabanks, trying to squeeze every last cent of profit out of these families and your communities, and making it harder to serve your members?

That’s the case I’m going to keep making, and we need every single voice speaking out in this fight.