On February 16, 2011, a group of economists, housing advocates, and civil-rights organizations met in Washington, D.C. to discuss the future and reform of government-sponsored enterprises, or GSEs. The forum was hosted by the National Council of La Raza (NCLR) and partners; the National Fair Housing Alliance, The Opportunity Agenda, and the Center for Responsible Lending. Serendipitously scheduled to take place just five days after the Treasury Department and the Department of Housing and Urban Development released Reforming America’s Housing Finance Market, a report detailing the Administration’s position on the future of the GSEs, the meeting was timely and deeply informative.
The opening remarks, delivered by HUD Secretary Shaun Donovan, reviewed the current situation in the housing finance market and aimed to put the Administration’s position on the GSEs in context. While the audience seemed receptive, there were a few challenging questions posed. The Administration’s report lays out three options for winding down the ailing Fannie Mae and Freddie Mac, but states no preference for any of the three, a point queried by some in the audience.
The morning panel offered a detailed look at the civil rights perspective on housing finance reform and provided civil rights leaders with an opportunity to discuss what’s needed to keep capital flowing to all communities. The program included notable panelists: Janet Murguía, President and CEO, NCLR; Shanna Smith, President and CEO, National Fair Housing Alliance; Hilary Shelton, Washington Bureau Director and Senior Vice President for Advocacy, NAACP; Marc Morial, President and CEO, National Urban League; and Lisa Hasegawa, Executive Director, The National Coalition for Asian Pacific American Community Development.
The afternoon panel, designed to put meat on the bones of the issue, offered a policy-rich view of housing reform. Speakers included: Martin Eakes, CEO, Self-Help/Center for Responsible Lending; Paul Leonard, Vice President of Government Affairs, Housing Policy Council, Financial Services Roundtable; Ellen Seidman, the former Director, Office of Thrift Supervision, U.S. Department of the Treasury; and Alden McDonald, Jr., President and CEO, Liberty Bank.
The group has garnered its fair share of press attention. The Washington Post noted “An alliance of civil rights organizations was critical of two of the options the administration laid out and expressed reservations about the third.” The paper went on to quote the group’s response to the Administration report, “In its report, the Administration pledges to ensure that all communities and families have access to capital needed for sustainable homeownership and a range of rental options. Of the three options that the Administration proposes, the first two, which call for complete and near-complete privatization, will entirely fail to meet this goal and will instead marginalize communities of color. . The third option, offering catastrophic reinsurance, inspires more confidence than the first two, but lacks important details as to how it would serve all Americans well.” The Root noted the group’s fear that the third option would “leave most Americans at the mercy of Wall Street.” Announcing the forum, Housing Wire commented, “The consumer and civil rights groups want to brainstorm some of the mechanisms that should be deployed in the housing system to keep it accessible to all home buyers.”