In a letter to Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan dated February 9, American Bankers Association (ABA)’s President and CEO Frank Keating suggests the government’s primary role be limited to ensuring stability in the event of market failure, and it should gradually exit the primary housing finance market all together, and help reestablish private markets without destabilizing the Federal Home Loan Banks. The ABA says the guarantee fees (G fees) paid to the Government Sponsored Enterprises (GSE) should be raised to help offset losses incurred by Fannie Mae and Freddie Mac, and to enable the private market to better compete with the GSEs. The letter suggests the mortgage finance end result should be a mix of 10 percent FHA and VA loans, 30 percent private business operated with a government backstop, and 60 percent with no government guarantees. In addition to strong regulation for whatever form a future GSE might take, the steps to achieve these goals need to be taken cautiously, given the fragile state of the current housing market.