A government-sponsored enterprise reform bill should not be used to move the Federal Home Loan Banks into the business of securitizing mortgages, according to several banking groups that represent a majority of FHLBank members.The Mortgage Bankers Association and National Association of Home Builders are pushing a securitization amendment so the FHLBanks can compete directly with Fannie Mae and Freddie Mac in the mortgage-backed securities market. However, the American Bankers Association, Independent Community Bankers of America and America's Community Bankers are more concerned about how the FHLBanks will be treated under a new GSE regulator than about securitization powers. "We don't think this is the appropriate time to look at it," said ICBA director Ann Grochala. "It would slow down the [GSE] bill and we don't want that to occur," she added. The ABA has taken a similar position. "We didn't think this is procedurally the right time to bring this up. This is not what the legislation is about," senior counsel Joe Pigg told MortgageWire. He noted that ABA believes the current FHLBank regulator has the authority to approve a securitization program.

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