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The FHFA’s Suggestions to Congress

On Wednesday, the Federal Housing Finance Agency (FHFA) released its 2018 annual Report to Congress, meeting the requirements of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. The report included commentary from FHFA Director Mark Calabria, encouraging Congress to act on housing finance reform while also requesting chartering authority similar to the Office of the Comptroller of the Currency.

“There is urgent need for Congress to act on housing finance reform,” Calabria said. “To promote competition in the marketplace, I encourage Congress to authorize additional competitors and provide FHFA the same powers as other federal financial regulators."

Calabria also spoke on the GSEs, Fannie Mae and Freddie Mac, noting the need to put an end to conservatorship.

“The Enterprise conservatorships were established as a short-term measure to address instability and ensure market function during the financial crisis,” Calabria noted. “They are now of unprecedented duration and scope and leave the mortgage market, and American taxpayers, vulnerable to another market downturn. FHFA will set an ambitious agenda that ensures that the mortgage market and FHFA’s regulated entities do not return to pre-financial crisis business models.”

Calabria had previously discussed his desire to take the GSEs out of conservatorship, and in an interview with the Wall Street Journal, Calabria stated that he wants to out the now-profitable GSEs back into private hands, something that has been tried and failed by lawmakers in the past.

“I see my goal as setting a path to end the conservatorship” for the companies he said, adding, “they have to be stronger, healthier companies” compared to before the 2008 housing crisis.

“My objective is to get us to a spot where we don’t have to worry about the system blowing itself up,” he added

The FHFA’s letter includes several recommendations to Congress, including acting on housing finance reform, increasing competition, and strengthening the FHFA's regulatory powers.

Read the FHFA’s full letter to Congress here.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.

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