NCBA Applauds the GAO Recognition of the Cooperative Business Model as Solution for Restructuring Fannie Mae and Freddie Mac
The National Cooperative Business Association (NCBA) is pleased that the Government Accountability Office (GAO) recognizes the positive value the American public can realize by restructuring Fannie Mae and Freddie Mac as cooperative businesses. GAO made this recommendation in its Nov. 15, 2010, Report to Congress (http://gao. gov/products/GAO-11-33R).
Washington, DC (PRWEB) November 17, 2010
The National Cooperative Business Association (NCBA) is pleased that the Government Accountability Office (GAO) recognizes the positive value the American public can realize by restructuring Fannie Mae and Freddie Mac as cooperative businesses. GAO made this recommendation in its Nov. 15, 2010, Report to Congress.
Paul Hazen, President and CEO of the NCBA said, “It is very gratifying that the GAO has recognized what we have known for years: that cooperatives – through their member ownership – responsively meet market needs.”
In the report, the GAO states, “that lenders would have financial incentives to engage in sound mortgage underwriting because, if they do not, then poorly underwritten mortgage loans sold to the cooperatives could result in significant losses [that] could adversely affect the capital investments that lenders have in such cooperatives.” The GAO report further stated, “Fannie Mae and Freddie Mac help provide a secondary mortgage market for conventional conforming loans and thereby enhance liquidity in housing finance.” However, due to the establishment as for-profit shareholder corporations, with an implied government guarantee, it led both Fannie Mae and Freddie Mac to take excessive risks, resulting in costs that the GAO estimates will reach $400 billion to the U. S. taxpayer.
Hazen added, “Because cooperatives operate without outside stockholders, they are able to take a long-term view for the benefit of the co-op’s owners and consumers. NCBA looks forward to working with the new Congress and the Administration to implement member-owned cooperative solutions for the myriad of challenges facing our economy.”
Over 29,000 cooperatives operate in the United States in all facets of our economy, serving farmers, small businesses, healthcare, energy and childcare among others. (For a complete listing, please visit http://www. ncba. coop). It is for this reason that the United Nations Secretary-General Ban Ki-moon declared, "Cooperatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility," when announcing 2012 as the International Year of Cooperatives.
ABOUT NCBA
Headquartered in Washington, DC the National Cooperative Business Association creates cooperative connections across all sectors of the nation's more than 29,000 cooperative businesses, including agriculture, food distribution and retailing, childcare, credit unions, housing, healthcare, purchasing, worker, energy, and telecommunications cooperatives. In addition, NCBA's CLUSA International Program has helped develop cooperatives and other sustainable businesses in over 50 countries since 1953. CLUSA currently runs 23 projects in 11 countries. To learn more about NCBA, please visit http://www. ncba. coop.
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