The Federal Housing Finance Agency (FHFA) last week released further proposed amendments to the regulatory capital framework rule for the Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac. Additional details can be found on CUNA’s Removing Barriers Blog.
The proposed amendments are intended to remove inappropriate capital disincentives to the Enterprises to transfer risk. The proposed amendments would:
According to the FHFA, the changes should better reflect the risks inherent in the GSEs’ business models and encourage them to distribute acquired credit risk to private investors rather than to buy and hold that risk.