The Treasury Department and the Federal Housing Finance Agency (FHFA) announced on Tuesday the suspension of several parts of the Preferred Stock Purchase Agreements (PSPAs) 2021. CUNA alerted the acting director of the FHFA, Sandra Thompson, in a letter and in meetings with Thompson and her employees to the concerns of the credit union about several of the suspended regulations.
The FHFA will consult with the Treasury Department on the scope of the review and recommended revisions to the PSPA requirements.
Suspended provisions that CUNA has raised concerns include the 7% cap on investments and second home loans.
“This cap restricts credit unions, resulting in more consumers getting loans from predatory lenders or at a higher cost than necessary… The FHFA should prioritize liquidity for community lenders such as credit unions, which often offer smaller loans to underserved populations. This would ensure that these consumers can get the credit they need safely and at an affordable price, ”CUNA’s July 1 letter to Thompson said.
CUNA added that the cap could further increase the cost of financing affordable rental housing and unnecessarily increase the cost of credit and housing for consumers.