Financial Stability Oversight Council Supports FHFA Capital Proposal

The Financial Stability Oversight Council voted unanimously on Sept. 25 to support a resolution in favor of the Federal Housing Finance Agency's (FHFA) re-proposed capital framework for Fannie Mae and Freddie Mac that was issued this spring. Created by the Dodd-Frank Act of 2010, the Financial Stability Oversight Council (FSOC) is a committee responsible for monitoring the financial system in the United States. Though offering support for the proposal, FSOC noted that the proposed capital would be much lower than what is required for banks. FHFA's proposed rule is a critical step toward the agency's goal to release the two government-sponsored enterprises from conservatorship. When it announced the plan in May, FHFA said that if the new proposal had been in effect in 2019, Fannie Mae and Freddie Mac would have held a combined $243 billion in capital. NAHB recently sent written comments to FHFA expressing concern that its proposed higher capital requirements for Fannie Mae and Freddie Mac could ultimately raise the cost of mortgage credit.