On Wednesday, the Federal Housing Finance Agency (FHFA) released a final Capital rule for the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. The rule requires the GSEs to maintain tier 1 capital in excess of 4%.
Jesse Van Tol, CEO of the National Community Reinvestment Coalition (NCRC), made the following statement:
“Key concerns we raised about the proposed rule persist in the final rule. The problem with this approach is that it erroneously treats the GSEs as banks and therefore requires bank-like capital. This leads to gratuitously high capital levels, raising mortgage rates and fees and further undermining the affordability of mortgage credit for underserved borrowers. This rule will add to the mounting challenges facing low- and moderate-income borrowers and borrowers of color who want to access homeownership and affordable refinances, there are just no two ways around it.
“It’s a bad approach under any circumstances, but even more so as the nation faces uncertain and uncharted waters ahead recovering from the pandemic.”