FHFA Issues Three Final Rules And One NPR To GSEs

The Federal Housing Finance Agency (FHFA) has sent to the Federal Register three final rules and one advance notice of proposed rulemaking (NPR) for government-sponsored enterprises (GSEs) Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBanks). The final rules pertain to Fannie Mae and Freddie Mac portfolio holdings, minority and women inclusion, and FHLBank housing goals. The advance NOPR pertains to membership in FHLBanks.

The final rule implements Section 1109 of the Housing and Economic Recovery Act of 2008 (HERA) and adopts without change FHFA's interim final rule on portfolio holdings, which became effective Jan. 30, 2009. The final rule establishes, as the standard for the GSEs' portfolio holdings, the criteria set forth in the senior preferred stock purchase agreements that each GSE may hold mortgage assets up to $900 billion as of Dec. 31, 2009.

For each subsequent year starting Dec. 31, 2010, each GSE is required to reduce its maximum holdings of mortgage assets by 10% of the maximum limit in the preceding year until the limit reaches $250 billion. At that point, no further reduction in the maximum limit is currently required. The rule is effective upon publication in the Federal Register.

The final rule implements Section 1116 of HERA and requires Fannie Mae, Freddie Mac and the FHLBanks to promote diversity and the inclusion of women, minorities and individuals with disabilities in all activities. The rule requires each entity to establish an Office of Minority and Women Inclusion, or designate an office responsible for carrying out the requirements at every level of the organization, including management, employment and contracting.

The FHFA says it will continue to refine its plans to implement the diversity provisions of The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Section 1116 with respect to the agency's operations and intends to amend this rule when those plans are finalized. The rule is effective 30 days from its publication in the Federal Register.



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