WASHINGTON, DC - U.S. Senator Robert Menendez provided the following opening statement for the record at the Senate Banking Committee markup of S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2013.

"Thank you, Mr. Chairman. I appreciate the work that you, Ranking Member Crapo, and members of this Committee-particularly Senators Corker and Warner-and your staff have put into this bill, and the good faith, bipartisan way the Committee has engaged a very challenging set of issues. Housing finance reform affects major parts of our economy, and directly or indirectly impacts the housing and personal finances of almost every American family. So it's important that we get this right.

"While I am not supporting the bill before the Committee today in its current form, my vote should not be mistaken as support for the status quo. Our current system has well-known problems. Fannie Mae and Freddie Mac were not the only offenders in the financial crisis, but they were not innocent bystanders. Misaligned incentives and the perception of an implied government guarantee created an environment in which the GSEs chased profits by taking on excessive levels of risk, but stuck taxpayers with the losses.

"Too much of our housing finance system's infrastructure remains tied to the credit risk-taking functions of these two large companies. Because of the critical role the GSEs play, their continuing conservatorship has contributed to uncertainty and instability. Credit standards are tight, shutting responsible borrowers out of the system. And much-needed funding for the Housing Trust Fund and Capital Magnet Fund remains suspended. So the need for reform is clear.

"What reform should look like, however, has been a challenging problem to solve. In my view, any changes must maintain affordability and access for creditworthy borrowers, protect taxpayers, preserve financial stability, and promote broad-based economic growth and job creation. The system must also equitably serve all communities through all cycles of the market. And any transition must be carefully planned to minimize disruptions to the housing market.

"Progress has been made over the last several weeks and months developing ideas for addressing these critical priorities. But before we pull the trigger on a major overhaul, we need to be confident that each element will work as intended, and that the system includes sufficient fallbacks in case parts of it do not work as planned. We also need a clear understanding of the effects on homeownership costs and access - both the size of the impact and the distribution - as well as financial stability, economic growth, and taxpayer protection.

"I also have concerns that the bill as written could unnecessarily limit homeownership opportunities for creditworthy borrowers without adding additional benefits for taxpayers. It is critical that the system does not needlessly exclude first-time homebuyers-like I once was-who do not come from historically "favored" backgrounds and who may not be purchasing a home in historically "favored" communities, but can afford to buy a home and responsibly pay their mortgage.

"As I said, I believe a great deal of progress has been made, even if we ultimately were unable to come to an agreement in time for today's vote. I think it would be productive to continue developing ideas that have been discussed and, where appropriate, establish pilot programs or move them by legislation, whether as a single package or in separate pieces. Our bipartisan conversations have been extremely helpful, so I want to reiterate my interest in continuing these conversations as the process moves forward. Today's vote should not mean the end of an important and much-needed effort.

"Thank you again, Mr. Chairman and Ranking Member Crapo, and your staff for the work and thought you have put into this issue. I look forward to continuing our bipartisan work as this effort moves forward."

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