What GSE Reform Impasse Means for Other Bank Rules

- May 27, 2014

American Banker

May 27, 2014, By Joe Adler

The Congressional stalemate over housing finance reform has left looming questions about the scope and enforcement of other bank regulations already in the pipeline.

The fate of the government-sponsored enterprises Fannie Mae and Freddie Mac is commingled with various other regulatory provisions stemming from the crisis. Most notably, the Consumer Financial Protection Bureau’s underwriting overhaul — known as the qualified mortgage rule — and the separate pending risk retention requirement for securitizers both provide substantial flexibility to Fannie- and Freddie-backed loans while the GSEs are still in conservatorship. How long they stay open also affects how long banks can use GSE-issued securities to comply with new capital and liquidity rules.

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