WASHINGTON—The Federal Housing Finance Agency (FHFA) announced it will re-propose its rule – likely sometime next year – to set capital requirements for the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac.
"The 2018 Capital Rule was proposed before FHFA began the process of retaining capital at the Enterprises as a first step toward ending the conservatorships," FHFA Director Dr. Mark Calabria said in a release. "In fairness to all interested parties, the comments submitted during the previous rulemaking were submitted under a different set of assumptions about the future of the Enterprises. During the process of the rulemaking, important issues were identified that will be addressed in the re-proposal."
NAFCU, commenting on the original proposal, offered its general support but recommended the FHFA allow the GSEs to submit capital restoration plans as allowed under the Housing and Economic Recovery Act – a provision that makes clear Congress envisioned a path to remove the GSEs from conservatorship. The association also believes that restoration plans shouldn't be approved until Congress has agreed to codify certain safeguards.
In September, the Treasury Department and Department of Housing and Urban Development released housing finance reform plans, which gave the FHFA more discretion on regulatory capital requirements for the GSEs. The following month, the Treasury and FHFA announced the GSEs would be allowed to retain more than their current $3 billion in capital: $25 billion for Fannie Mae and $20 billion for Freddie Mac. The FHFA also recently released a strategic plan that provides a framework for how the agency will prepare the GSEs to be released from conservatorship.