Letter: Comments on FHFA’s Proposed Rule on Enterprise Capital Requirements

June 21, 2019

A Comment Letter from U.S. Mortgage Insurers

Alfred M. Pollard
General Counsel
Federal Housing Finance Agency
Eighth Floor
400 Seventh Street, SW
Washington, D.C. 20219

RE: Comments/RIN 2590-AA95

Dear Mr. Pollard:

This letter is submitted by U.S. Mortgage Insurers (USMI), a trade association comprised of the leading private mortgage insurance (MI) companies in the United States.0F1 Together, the private mortgage insurance industry has helped nearly 30 million homeowners over the past 60 years, including more than 1 million in the past year alone.

USMI is dedicated to a housing finance system backed by private capital that enables access to housing finance for all creditworthy borrowers while protecting taxpayers. USMI supports meaningful and appropriate capital requirements for Fannie Mae and Freddie Mac (the “Enterprises”) and appreciates the Federal Housing Finance Agency (FHFA) for initiating this rulemaking process, and for affording us an opportunity to submit comments.

Currently, the Enterprises use a FHFA-developed Conservatorship Capital Framework (CCF) to align business and pricing decisions (e.g. G-Fees) with economic risk. The notice of proposed rulemaking (NPR) states that during conservatorship, FHFA expects the Enterprises to “use assumptions about capital described in the rule’s risk-based capital requirements in making pricing and other business decisions,” even though the new standards will not be used to determine capital compliance until after the conservatorship ends.1F2 Therefore, the final regulation could have an immediate real-world impact on the Enterprises’ activities and the cost and availability of mortgage credit. As a result, this rulemaking is very significant for our members, other participants in housing finance, and the American public.

USMI’s full comments to FHFA can be found here.