ARLINGTON, Va.—The Federal Finance Housing Authority (FHFA) must elevate its ability to regulate government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac before it can release them from conservatorship, according to a report by the FHFA’s inspector general.
FHFA Director Mark Calabria released a strategic plan last October that provides a framework for how the agency will prepare the GSEs to be released after a decade of government supervision and conservatorship. The inspector general’s report notes that while Calabria has begun the process, work is still needed to strengthen the FHFA’s existing supervisory efforts over the GSEs, reported NAFCU.
In addition to the strategic plan, the FHFA announced earlier this year that the agency hired a financial advisor – Houlihan Lokey Capital, Inc. – "to assist in the development and implementation of a roadmap to responsibly end the conservatorships of Fannie Mae and Freddie Mac.”
Where Work is Needed
On remediation, the report summarizes areas within the FHFA where work is most needed in order to successfully release the GSEs, specifying the following program elements:
- Examination Guidance and Execution
- Adequately Sized Examiner Workforce with Necessary Qualifications and Training
- Communication of Supervisory Findings
- Quality Control