Groups applaud FHFA plan to issue new capital rules for Fannie and Freddie

The Independent Community Bankers of America (ICBA) applauded a proposal by the Federal Housing Finance Agency (FHFA) to issue new capital rules for Fannie Mae and Freddie Mac.

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FHFA suspended regulatory capital requirements after it put Fannie and Freddie into conservatorships in September 2008 due to the recession.  Now, FHFA is proposing a new framework for capital requirements for Fannie Mae and Freddie Mac and a revised minimum leverage capital requirement.

In a letter to FHFA Director Mel Watt, ICBA and other organizations urged him to direct Fannie and Freddie to develop capital restoration plans. Further, they encouraged Watt to suspend the systematic sweep of Fannie and Freddie’s revenues into government coffers to increase their capital buffers.

“Development of capital restoration plans and suspending the net-worth sweep are crucial first steps to rebuilding capital buffers, and to accelerating the date when the GSEs can finally be released from conservatorship as safe, reformed, regulated mortgage aggregators for lending institutions of all sizes and charters,” ICBA and the coalition of organizations wrote to Watt. “These first steps help protect the taxpayers and help enable the GSEs to fulfill their statutory mandate of facilitating the financing of affordable housing for low- and moderate-income families while maintaining a strong financial condition.”

The letter was also signed by the Community Home Lenders of America, Leadership Conference on Civil and Human Rights, Leading Builders of America, NAACP, National Community Reinvestment Coalition, National Urban League, Prosperity Now, and Community Mortgage Lenders of America.