FHFA Plan Emphasizes Ending Conservatorships

Oct 29, 2019
The Federal Housing Finance Agency said ending the conservatorships of Fannie Mae and Freddie Mac is a central element of a new strategic plan on the enterprises.
 
In the ICBA-supported strategic plan, the FHFA said the 11-year conservatorship is far longer than any previous financial institution conservatorship. The FHFA also said the conservatorship has left the enterprises undercapitalized, so the agency is statutorily mandated to put them back into a safe, sound, and solvent condition. The agency's recent actions directing Fannie and Freddie to start retaining earnings is a step in that direction.
 
Speaking in Austin, Texas, FHFA Director Mark Calabria said the agency is reviewing potential financial advisors to evaluate capital-raising options as it develops a capital rule needed for the enterprises to raise additional private capital. "This may be the most important rule of my tenure," he said.
 
ICBA strongly supports the documents and the separate FHFA and Treasury Department plan to begin recapitalizing Fannie and Freddie, which is designed to eventually release them from conservatorship. ICBA is actively engaged with the FHFA on this issue and details its housing-finance priorities in its Principles for GSE Reform white paper.