ICBA signals support for FHFA strategic plan

ICBA said it supports U.S. Federal Housing’s plan to focus on safety and soundness of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks while emphasizing the importance of reducing regulatory burdens and maintaining the enterprises’ mission to foster a liquid, efficient, resilient, and competitive housing finance system.

Details: In a letter to U.S. Federal Housing Director Bill Pulte on the agency’s strategic plan for 2026-2030, ICBA:

• Said the FHFA should move forward with ending the 17-year conservatorship of Fannie Mae and Freddie Mac.

• Added specific suggestions to ensure a robust and equitable secondary market, including preserving the cash window, full and equal access to all members, and retention of mortgage servicing rights.

• Included several principles to avoid a major market disruption and ensure community banks aren't harmed by Fannie and Freddie's privatization, including a strong independent regulator, an ongoing credit risk transfer program, an ongoing fee to maintain the Treasury line of credit, continued recapitalization, and a utility-like structure.

• Expressed appreciation that the agency has modifying its approach to FHLB regulation by focusing primarily on their statutory obligations instead of proposed recommendations of recent years that would have disrupted the system's ability to provide liquidity to community banks.

ICBA View: ICBA has repeatedly noted that the FHLB System has worked well for more than 90 years, providing community banks with liquidity to fund mortgage lending and community development projects, and has consistently urged the FHFA to follow the Housing and Economic Recovery Act of 2008 and end the conservatorship of Fannie and Freddie.

More on FHLBs: ICBA in February cautioned the FHFA against being overly prescriptive or undermining FHLB authority to effectively populate their boards while noting that community banks should continue to have a seat at the table regarding FHLB governance.