Back in June, the Federal Housing Finance Agency proposed a new rule on Fannie Mae and Freddie Mac’s capital requirements, opening the rule up for public comment.
Now, after the FHFA said it received a high level of interest and several requests from stakeholders for more evaluation time, it is pushing back its comment period by two months.
After placing the government-sponsored enterprises into conservatorship in September 2008, the FHFA suspended regulatory capital requirements. Now, it is proposing a new framework for risk-based capital requirements and revised minimum leverage capital requirements for the GSEs, but it's important to note that the rules wouldn't go into effect until the GSEs exit conservatorship, if that ever happens.
As stated, these new capital requirements for the two companies would remain suspended while they remain in conservatorship, however, the FHFA explained it is appropriate to communicate the agency’s views about capital adequacy for the GSEs in the future.
The original deadline for public comment was September 17, 2018, however the FHFA is now extending the deadline by 60 days to November 16, 2018.
Interested parties can read the proposed rule in full here.
Although many parties continue to stress the importance of GSE reform, including Federal Reserve Chair Jerome Powell, Congress’ lack of attention to the issue shows it may not be resolved anytime in the near future.
Given this knowledge, the FHFA would seem to have plenty of time to extend its deadlines and form its final rule proposal.
Photo credit: Shutterstock.com