We are approaching the 10th year of the conservatorship of Fannie Mae and Freddie Mac, yet Congress continues to struggle to produce a comprehensive reform bill for the government-sponsored enterprises. GSE reform has stalled as Fannie and Freddie — which must sweep their profits to the Treasury — are projected to have zero net worth at the end of this year.

But there is good news. The GSEs have repaid their original $185 billion advance to Treasury, plus another $70 billion in funds to taxpayers. Significant reforms have been made to the old “private gain, public loss” GSE model, including an end to no-documentation loans resulting from new mortgage regulations, significant credit risk-sharing, a wind-down of the GSEs’ portfolios and the development of the Federal Housing Finance Agency into a strong regulator.

Congress should try to reach consensus on GSE reform, but we should not wait indefinitely for Congress to act. Last month, the Community Home Lenders Association proposed a comprehensive reform plan that would not require congressional approval. This proposal builds on the reforms already in place, removes the taxpayer risk of Treasury continuing to advance cash to the mortgage giants, and relies on the expertise of FHFA and Treasury to implement the plan.

The housing finance system should be rebuilt around the principle of full and competitive access to the secondary market, not dominance by Wall Street banks, as well as consumer access to mortgage credit.

Our plan starts with a no-brainer. FHFA, with the support of Treasury, should use its authority under the 2008 Housing and Economic Recovery Act of 2008 to suspend GSE dividend payments to Treasury, allowing Fannie and Freddie to build a modest capital buffer. FHFA Director Mel Watt has referred to the GSEs’ lack of capital as “the most serious risk” facing the companies. Enabling the GSEs to build a buffer would avoid a further Treasury advance. But note that a buffer should not be conflated with the notion of a complete GSE recapitalization.

Secondly, and consistent with the 2008 HERA statute, FHFA — as the GSEs’ conservator — should develop a capital restoration plan to show how the GSEs could emerge from conservatorship. We believe the best approach for such a plan is a utility model — with taxpayers protected through capital to absorb losses, risk sharing to reduce direct GSE risk, strong underwriting of loans and counter-party risk, and fees to compensate for the federal government backstop. Treasury must then amend the Preferred Stock Agreement, setting in motion the process of recapitalization.

Unlike some other reform proposals, we are focused on protecting small and midsized lender access through specific provisions to address the risks of control of GSE loans by the large Wall Street banks. Fannie and Freddie should be preserved, not replaced or supplanted by the large vertically-integrated banks that can use their securitization powers to dominate the mortgage origination market. Such an outcome would be anti-competitive — bad for consumers and bad for small lenders.

Before the crisis, large lenders like Countrywide enjoyed preferred pricing in the mortgage market, but the lessons from the mortgage meltdown showed the need for formal protections against such favored treatment to ensure a fairer and more transparent housing finance system. The CHLA plan would prohibit GSE discounts to lenders based on loan volume. This includes discounts on guarantee fees as well as risk-sharing pricing. The plan also promotes the use of back-end risk-sharing, instead of upfront risk sharing. The latter could create a choke point that works against small lender access.

Congressional action to reform the GSEs ultimately is needed for steps such as providing an explicit government guarantee and ensuring that guarantee serves the full market. But we must confront the risk of continued drift and inaction if Congress is unable to act. This plan is workable, minimizes transitional risks, protects taxpayers, and puts consumers and the housing market first.