FHFA regulatory burden streamlining should not leave low-income and minority borrowers out to dry

Credit unions are vital to the housing market as they provide low- and moderate-income borrowers with the ability to obtain mortgage credit and streamlining any regulatory framework should not come at the expense of supporting low-income and minority consumers. This potential negative impact of the Federal Housing Finance Agency’s (FHFA) 2026-2028 Enterprise Housing Goals on credit unions is the focus of America’s Credit Unions letter sent Monday responding to agency's request for comment. 

The FHFA seeks to reduce regulatory burden and ensure operational efficiency across the secondary mortgage market, but the proposed rule as currently written seems to go too far. It could potentially negatively impact low-income and minority mortgage originations.  
America’s Credit Unions Regulatory Affairs Counsel Tyler Maron described these credit union concerns, specifically pointing to the reduction of the single-family low-income purchase subgoal and the merging of the low-income and minority census tract benchmark subgoals. 

It is crucial, Maron wrote, that the FHFA ensures that credit unions and other depository institutions have continued access to the secondary mortgage market. Reduced focus on these communities may lead to reduced liquidity for community lenders like credit unions and consequentially, reduced homeownership. Numerous borrowers could be excluded from the market if the new planned benchmarks for low-income mortgages take effect. 

The proposed rule would also consolidate the current low-income census tracts home purchase subgoal and the minority census tracts home purchase subgoal. The letter argues that while there is considerable overlap between the two, this overlap does not consider the 30% of the minority census tract that is distinct from the low-income census tract.  

This mirrors credit union recommendations in 2021 encouraging two separate subgoals to ensure that underserved communities are not left out of the FHFA’s housing goals. 

Read the full letter here