Groups urge FHFA to extend comment period on GSE capital plan
WASHINGTON — Seventeen trade groups want the Federal Housing Finance Agency to double the comment period for a proposal to require Fannie Mae and Freddie Mac to hold more than five times their current capital levels.
In a letter to FHFA Director Mark Calabria sent Tuesday, the organizations urged the agency to accept comments by Oct. 28, or an additional 60 days. The comment period is set to end Aug. 31.
The letter was signed by the American Bankers Association, Center for Responsible Lending, Mortgage Bankers Association, Housing Policy Council, National Association of Realtors and Structured Finance Association, among others.
“We believe that it is essential that market participants have time to focus on this complex proposed rule, which poses over 100 questions to respondents and has the potential to significantly affect both the cost and availability of mortgage financing, as well as affordability for homeowners and renters in both the single family and multifamily space,” the groups said.
The capital plan — which would go into effect once Fannie and Freddie exit government conservatorship — builds on a previous proposal issued in 2018 by former FHFA Director Mel Watt. That proposal had a 120-day comment period. The groups that signed the letter argued they should have a similar amount of time to comment on the new proposal.
The coronavirus pandemic has limited the ability of market participants to review the plan thoughtfully, they added.
“These unique and unprecedented circumstances further support the need for a longer period of time for public review of the [enterprise capital framework] and its implications for the GSEs, borrowers, consumer groups, lenders, servicers, investors and other market participants,” the trade groups said.
The capital plan, which the FHFA unveiled in May, would align capital requirements for the government-sponsored enterprises with those of the large banks. Under the proposal, the GSEs would have had to hold a combined $234 billion in capital as of Sept. 30, 2019, representing 3.85% of their total assets and 13.9% of risk-weighted assets.
Currently, Fannie and Freddie's retained earnings are capped at $45 billion combined.