ACB Blasts Ginnie MBS Proposal

America's Community Bankers says it is "strongly opposed" to a proposal that would allow Ginnie Mae mortgage-backed securities to be sold in denominations as small as $1,000.Currently, there is a $25,000 minimum on Ginnie Mae MBS. But ACB is concerned that a $1,000 Ginnie MBS would compete with certificates of deposits offered by federally insured banks and thrifts. "Over time, this could eliminate options for liquidity for community banks and weaken the ability of insured depository institutions to respond to the credit needs of their communities," ACB says in a comment letter to Ginnie Mae. ACB has a running feud with Fannie Mae and Freddie Mac, which allow securities brokers to sell their debt securities in $1,000 denominations. ACB even appealed to the Treasury Department to review this issue. But the Treasury passed the buck to the Securities and Exchange Commission, where it has been sitting for the past two years.