ACB Opposes Forced GSE Divestment of AU

America's Community Bankers would oppose legislative language in a GSE bill that forces Fannie Mae and Freddie Mac to divest their automated underwriting systems, the trade group says in a letter to Senate Banking Committee leaders.However, ACB says congressional legislation to strengthen regulation of the two government-sponsored enterprises should encourage competition and "prevent the GSEs from preempting or excluding" private lenders from using their own AU systems. A GSE bill introduced by Sen. Chuck Hagel, R-Neb., has a "bright line" test that keeps the two GSEs from encroaching on the business activities of lenders in the primary market. (The GSEs were chartered to be secondary market agencies.) ACB supports a bright-line test, but says the Hagel language needs to be clarified to ensure that its members would continue to have access to Fannie's and Freddie's AU systems. The Mortgage Bankers Association supports the bright line in the Hagel bill, but also says it wants its members to have access to the GSE AU systems. "We just want a little more competition," MBA's top lobbyist Kurt Pfotenhauer said. The new GSE regulator could require Fannie and Freddie to certify other AU systems for the delivery of loans, he suggested.