WASHINGTON—The Federal Housing Finance Administration (FHFA) has published a final rule that requires the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, to submit annual capital plans to the agency for approval.
“The final rule provides the Enterprises with a stable regulatory framework that ensures the amount of capital held is commensurate with each of their risk profiles,” said FHFA Acting Director Sandra Thompson. “This is an important step in securing the safety and soundness of the Enterprises by actively monitoring and maintaining proper levels of capital throughout the economic cycle.”
What’s Required
NAFCU noted that under the final rule, Fannie Mae and Freddie Mac will be required to submit their first capital plans to the FHFA by May 20, 2023, and mandates that the GSEs' plans include:
- An assessment of the expected sources and uses of capital over the planning horizon
- Estimates of projected revenues, expenses, losses, reserves, and pro forma capital levels under a range of the GSEs internal scenarios, as well as under FHFA's scenarios
- A description of all planned capital actions over the planning horizon
- A discussion of how the GSE will, under expected and stressful conditions, maintain capital commensurate with the business risks and continue to serve the housing market
- A discussion of any expected changes to the GSEs business plan that are likely to have a material impact on the GSEs capital adequacy or liquidity
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