WASHINGTON—The Federal Housing Finance Agency (FHFA) should review all of its existing regulations for potential improvements, including streamlining existing regulations, as part of its five-year regulatory review process, both NAFCU and CUNA have told the agency.
The FHFA made a request for comments in April as part of required regulatory review process on ways to reduce regulatory overlap, possible approaches that would be less burdensome than current regulation and how to clarify requirements.
NAFCU, in a letter to the FHFA, encouraged the agency to conduct a more comprehensive review of its regulations, guidance and interpretive documents to provide even more clarity to regulated entities.
Commenting specifically on the Federal Home Loan Bank (FHLB) regulations, NAFCU Regulatory Affairs Counsel Ann Kossachev encouraged the FHFA to find ways to make it easier for credit unions and other members to access appropriate liquidity. Specifically, she requested that the FHFA revise its regulations relating to "other real estate-related collateral" to include municipal bonds and clarify its regulations regarding the types of organizations that are eligible for membership at the FHLBs.
Kossachev also encouraged the FHFA to go through the formal notice and comment rulemaking process required by the Administrative Procedure Act – especially regarding directives to Fannie Mae and Freddie Mac. "Credit unions and other institutions that utilize the GSEs should be entitled to comment throughout the entire process of any policy changes that affect their day-to-day lending procedures," she wrote.
In another recommendation, Kossachev asked the FHFA to update citations throughout its regulations. "Considering the FHFA's efforts to reduce regulatory burden and the Trump Administration's regulatory rollback agenda, there may be existing citations to regulations that are now obsolete," she wrote. She suggested this kind of a review be done more consistently – even annually.
CUNA’s View
In CUNA’s own letter to the FHFA, the trade association stated, “We appreciate the FHFA’s initiative in voluntarily conducting regulatory reviews on a regular basis. While the FHFA is not compelled to conduct such reviews by statute, and thus specific requirements such as those under the Administrative Procedures Act requiring agency consideration of comments received do not apply, we urge it to thoroughly analyze all public input received during this important process. In general, the FHFA should review all of its existing regulations with an eye toward how it can improve their effectiveness and reduce their burden.”
CUNA’s letter also reiterates concerns it shared in response to a recent FHFA request for information on potential changes to credit score requirements.
CUNA said it continues to encourage the FHFA to “work to find the right balance between safety and soundness on the one hand, and credit availability for American consumers on the other.”