Despite a direct request by six Democratic senators that Fannie Mae and Freddie Mac be allowed to rebuild capital, Treasury Secretary Steven Mnuchin did little to clarify the administration's thinking.
With the deadline for a federal-debt-limit renewal nearly a month away, bankers are dreading the prospect of higher funding costs, strained liquidity, weaker commercial loan demand and other ramifications if Washington does not act.
Dividend payments by Fannie Mae and Freddie Mac are due to come one day after the U.S. is estimated to hit the debt ceiling, raising the stakes in the debate over whether those payments should continue.
The Treasury Department will take a huge hit when Cecil Bancorp sells its bank, while 1st Mariner Bank in Baltimore will see its equity stake completely wiped out. Cecil opted for bankruptcy court when it was unable to resolve an impasse over its trust-preferred stock.