WASHINGTON—The Federal Housing Finance Agency (FHFA) has finalized its rule requiring the government-sponsored enterprises (GSEs) – Fannie Mae and Freddie Mac – to obtain prior approval before offering new products to the market or engaging in new activities.
The final rule establishes criteria for determining whether a new activity requires notice to the FHFA and if the activity merits public notice and comment, as well as implements section 1321 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, NAFCU noted.
In response to the proposed rule, NAFCU noted it asked the FHFA to provide a clear and “unambiguous” definition and scope of what constitutes a “new activity,” which the final rule does.
“The association also recommended that changes to the GSEs’ underwriting system not be considered a ‘new activity’ and the final rule clarifies what are substantially similar activities and broadens the exclusion to include GSE technology systems that apply mortgage terms and conditions or underwriting criteria,” NAFCU explained.
The New ‘New Activity’
The following are considered a “new activity” under the final rule if the GSEs are not engaged in it on or before the effective date of the final rule:
- A business line, business practice, offering or service that the GSE provides to the market either on a standalone basis or as part of a business line, business practice, offering or service
- An enhancement, alteration, or modification to an activity that is described by one or more of the following criteria:
- Requires a new resource, type of data, process, infrastructure, policy, or modification to an existing policy
- Expands the scope or increases the level of credit risk, market risk, or operational risk to the GSE
- Involves a new category of borrower, investor, counterparty, or collateral
- A pilot or modification to the duration or volume of a pilot
- An activity that results from a pilot
Excluded Activities
The final rule also includes activities that are excluded from being considered a new activity or new product, describes the exclusion for substantially similar activities, outlines what public interest factors will be considered by the FHFA to determine whether public notice and comment is needed on a new product, and details the new activity and new product submission process.
The rule takes effect 60 days after it is published in the Federal Register.
Just in Time for the Holidays, CUToday’s Free Morning Headline Email is Now Double-Free!
Don’t forget to check your Spam/Junk email folder if you haven’t been receiving your free, popular and daily CUToday.info news headlines.
And if you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time.
CUToday.info has received very positive response from readers following the move to an improved provider of the daily headlines, but many also noted they did need to go to their Spam/Junk folder and mark it as safe.
The new email solution has not only improved every reader’s delivery experience, but it also features a fresh, new format that is easy to read, especially on mobile devices.
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com.