FHFA to Re-propose Enterprise Capital Rule in 2020

The Federal Housing Finance Agency (FHFA) announced Tuesday that it will re-propose its rule to set capital requirements for the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac next year.

“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. 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,” said FHFA Director Mark Calabria.

“The Capital Rule is one of the most important rules I will issue as Director. This rule will be re-proposed and finalized within a timeline fully consistent with ending the conservatorships. Requiring the Enterprises to build capital that can properly support their risk ensures that taxpayers will never be on the hook again during an economic downturn.

The Treasury Department and Department of Housing and Urban Development in September released their housing finance reform plans, which gave the FHFA more discretion on regulatory capital requirements for the GSEs. Three weeks later, 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.

CUNA and the state leagues will continue to engage with the FHFA, Congress, and other stakeholders to ensure credit unions' continued access to a viable secondary mortgage market under any housing finance reform.