May 15, 2023

NAFCU comments on the FHFA’s proposed modifications to the GSEs regulatory capital framework

hOUSESNAFCU Senior Regulatory Affairs Counsel Aminah Moore wrote to the Federal Housing Finance Agency (FHFA) Friday to provide feedback on the FHFA’s proposal to amend several provisions in the Enterprise Regulatory Capital Framework (ERCF) for Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs).

“NAFCU generally supports the proposed amendments but urges the FHFA to swiftly implement the bi-merge credit report requirement and the median credit score calculation,” wrote Moore. “NAFCU additionally urges the FHFA to implement a pricing specific adjustment of the base risk weight for mortgages originated by credit unions.”

In February 2022, the agency published a final rule to amend the ERCF by refining the prescribed leverage buffer amount (PLBA) and risk-based capital treatment of retained credit risk transfer (CRT) securitization framework for the GSEs. The new proposed rule includes modifications of certain provisions related to guarantees on commingled securities, multifamily mortgage exposures secured by properties with government subsidies, derivatives and cleared transactions, and credit scores. 

In addition, these proposed amendments would clarify certain aspects of the ERCF and help to further align it with the risks faced by the GSEs.

“NAFCU appreciates the opportunity to comment on this proposed rule and applauds the FHFA for amending the ERCF as needed for proper capitalization of the GSEs,” concluded Moore.

NAFCU will continue to advocate on behalf of the credit union industry and its members' best interests in the housing finance system.