CUNA welcomes the Federal Housing Finance Agency’s (FHFA) efforts to adopt strong capital requirements, but has concerns about the lack of analysis of the impact on the cost of conventional mortgage credit in the primary market. CUNA filed a comment letter with FHFA Thursday in response to a proposed rule on capital requirements for government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.
“Specifically, we urge the FHFA to further examine whether the requirements, as currently proposed, strike the appropriate balance between preserving conventional mortgage affordability and ensuring proper capitalization of Fannie Mae and Freddie Mac,” the letter reads.
This proposed rule, though not slated to take effect while the GSEs remain in conservatorship—represents the FHFA’s first effort to fully redefine the parameters of their capital structures in the aftermath of the financial crisis.
CUNA remains concerned that FHFA’s notice of proposed rulemaking fails to adequately discuss any examination into how the new capital requirements will impact conventional mortgage rates.
“CUNA believes that the omission of this discussion represents an error in the FHFA’s analysis that should be remedied prior to any final rulemaking,” the letter reads. “Specifically, given that the Enterprises’ mission involves ensuring the affordability and accessibility of conventional mortgage credit, any choice between alternate capital requirements should include a consideration of their pricing implications in the primary market.”