WASHINGTON — House Republicans called on the director of the Federal Housing Finance Agency to bolster its oversight of Fannie Mae and Freddie Mac, urging the regulator to take more steps to ensure the government-sponsored enterprises do not overstep their legal bounds.
In a letter addressed to FHFA Director Sandra Thompson, Republicans led by Rep. French Hill of Arkansas suggested that the undercapitalization of Fannie and Freddie posed a considerable risk to the broader financial system. They also urged Thompson to prevent the GSEs from expanding into new areas of finance.
Fannie Mae and Freddie Mac “have a history of venturing into new activities and product offerings that go well beyond their congressionally approved roles in the secondary market,” the letter, sent July 7, said. “The FHFA must do more to ensure there is appropriate transparency regarding any new products or activities that the enterprises undertake and that these activities do not displace private firms or crowd out private capital.”
The letter acknowledged that under Thompson, the FHFA has taken some steps to improve government oversight of the GSEs, including the creation of a
“Simply requiring the enterprises to publish a list of their pilots and test-and-learn activities twice a year does not substitute for robust oversight by their conservator,” the Republican lawmakers wrote.
Representatives for the FHFA did not respond to a request for comment.
In June, Fannie and Freddie released three-year
The affordable housing crisis has also prompted the Biden Administration to call for
Some policy analysts have advocated for Fannie and Freddie to explore new types of mortgage lending that could expand homeownership in the U.S. among low-income communities. A study encouraging the GSEs to
The letter from House Republicans appeared to reference the GSEs’ housing equity plan announcement last month. “Pilot programs should not be operating as back doors for the enterprises to expand into areas already being served by the private sector or to push a housing policy agenda that introduces unacceptable risk to taxpayers,” the letter said.
Under the Trump administration, then-FHFA Director Mark Calabria spent much of his time in office pushing for the privatization of the GSEs but did not succeed before the Biden administration
The Republican lawmakers called for Thompson to finalize a “long overdue” rulemaking, the
Beyond Hill, the letter was also signed by Republican Reps. Blaine Luetkemeyer of Missouri, Bill Huizenga of Michigan, Andy Barr of Kentucky, Roger Williams of Texas, Barry Loudermilk of Georgia, Ted Budd of North Carolina, William Timmons of South Carolina, Van Taylor of Texas and Ralph Norman of South Carolina.
Last week’s letter follows a