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INVESTMENT GOVERNMENT PROPERTY PRESERVATION
FHFA REQUIRES
GSEs TO SUBMIT
ANNUAL CAPITAL
PLANS
As of June 1, the Federal Housing Finance
Agency (FHFA) has published a final rule that
supplements the Enterprise Regulatory Capital
Framework (ERCF) by requiring Fannie Mae
and Freddie Mac (the GSEs) to submit annual
capital plans to the agency and provide prior
notice for certain capital actions.
e final rule mandates that the GSEs'
capital plans include:
» An assessment of the expected sources and
uses of capital over the planning horizon;
» Estimates of projected revenues, expenses,
losses, reserves, and pro forma capital
levels under a range of the Enterprise's
internal scenarios, as well as under FHFA's
scenarios;
» A description of all planned capital actions
over the planning horizon;
» A discussion of how the Enterprise will,
under expected and stressful conditions,
maintain capital commensurate with the
business risks and continue to serve the
housing market; and
» A discussion of any expected changes to the
GSE's business plan that are likely to have a
material impact on the Enterprise's capital
adequacy or liquidity.
"e final rule provides the Enterprises
with a stable regulatory framework that ensures
the amount of capital held is commensurate
with each of their risk profiles," FHFA Acting
Director Sandra L. ompson said. "is
is an important step in securing the safety
and soundness of the Enterprises by actively
monitoring and maintaining proper levels of
capital throughout the economic cycle."
e requirements in the final rule are
consistent with the regulatory framework
for capital planning for large bank holding
companies.
e final rule will be permanent 60 days
after being published in the Federal Register.
e first set of capital plans are due May 20,
2023.
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