Ensuring that Fannie Mae and Freddie Mac are sufficiently capitalized will be critical for removing the GSEs from conservatorship, FHFA Director Mark Calabria said in a recent Q&A in Politico magazine. Calabria—who took over leadership of the agency last month—said that he is in the process of undertaking a review of the enterprises and their activities. Among other things, a risk-based capital rulemaking for the GSEs “needs to be finished before there’s an exit,” he said.
Calabria also discussed his intent to seek congressional authority in the coming days as he looks to transition FHFA from the role of conservator to supervisor of Fannie and Freddie. “One of the things we are trying to do is figure out how our practices compare to other financial regulators’ to make sure we’re on par,” he said. He added that it would be “appropriate for FSOC to deliberate on whether Fannie and Freddie should be designated” as systemically important financial institutions.
As the discussion around housing finance reform moves forward, ABA continues to call on Congress pursue a legislative solution that provides liquidity for the housing market, protects taxpayers and maintains access for community banks. The association will continue to engage with lawmakers from both parties—as well as FHFA—as plans for reform are advanced. Read the Q&A (subscription required).