Federal Housing Finance Agency: Capital planning and determination of capital safety margin

B-334366

June 17, 2022

The Honorable Sherrod Brown
President
The Honorable Patrick J. Toomey
Ranking Member
Banking, Housing and Urban Affairs Commission
United States Senate

The Honorable Maxine Waters
President
The Honorable Patrick McHenry
Ranking Member
Financial Services Committee
House of Representatives

Matter: Federal Housing Finance Agency: Capital planning and determination of capital safety margin

Pursuant to Section 801(a)(2)(A) of Title 5 of the United States Code, here is our report on an important rule promulgated by the Federal Housing Finance Agency (FHFA) titled “Capital Planning and Stress Capital Buffer Determination” ( RIN: 2590-AB16). We received the rule on May 31, 2022. It was published in the Federal Register as final rule on June 3, 2022. 87 Fed. Reg. 33615. The effective date is August 2, 2022.

According to FHFA, it is adopting a final rule that complements its final rule on the Enterprise Capital Regulatory Framework (ERCF) by requiring the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to submit annual capital plans to the FHFA and to provide advance notice for certain capital. Shares. See in general 85 Fed. Reg. 82150 (December 17, 2020) (ERCF Final Rule). The FHFA said the final rule incorporates the determination of the ERCF’s final rule stress capital buffer into the capital planning process. The FHFA also said the final rule requirements are consistent with the capital planning regulatory framework for large bank holding companies.

Attached is our assessment of FHFA’s compliance with the procedural steps required by Title 5 Section 801(a)(1)(B)(i) through (iv) with respect to the rule. If you have any questions about this report or would like to contact GAO officials responsible for valuation work relating to the subject matter of the rule, please contact Shari Brewster, Assistant General Counsel, at (202) 512-6398.

Shirley A.Jones
Associate Legal Director

Pregnant

CC: Clinton Jones
General Counsel
Federal Housing Finance Agency

PREGNANT

REPORT UNDER 5 USC § 801(a)(2)(A) ON A MAJOR RULE
ISSUED BY THE
FEDERAL HOUSING FINANCE AGENCY
ENTITLED
“CAPITAL PLANNING AND DETERMINATION OF THE CAPITAL BUFFER AGAINST STRESS”
(RIN: 2590-AB16)

(i) Cost-benefit analysis

In its brief, the Federal Housing Finance Agency (FHFA) indicated that a cost-benefit analysis of this final rule is not applicable.

(ii) Agency Actions Regarding the Regulatory Flexibility Act (RFA), 5 USC §§ 603–605, 607, and 609

The FHFA said it has reviewed the impact of this final rule under the RFA and certifies that the final rule will not have a significant economic impact on a significant number of small entities.

(iii) Agency Actions Regarding Sections 202-205 of the Unfunded Warrants Reform Act of 1995, 2 USC §§ 1532-1535

As an independent regulator, the FHFA is not subject to the order.

(iv) Other relevant information or requirements under laws and decrees

Administrative Procedure Act, 5 USC §§ 551 and following.

On December 27, 2021, the FHFA published a notice of proposed rulemaking. 86 Fed. Reg. 73187. The FHFA said it received public comment letters on the proposed rule from a total of 12 different commenters. The FHFA also said the commentators represented various interested parties, including the Federal Home Loan Mortgage Corporation, two trade associations, a corporation and eight individuals. FHFA further stated that three of the individuals each submitted multiple comment letters, resulting in FHFA receiving a total of 21 comment letters on the proposed rule. The FHFA responded to those comments in the final rule.

Red Tape Reduction Act (PRA), 44 USC §§ 3501–3520

The FHFA has determined that this final rule does not contain any information collection requirements under the PRA.

Legal authorization of the rule

The FHFA has promulgated this Final Rule pursuant to Sections 4511, 4513, 4513b, 4514, 4515–4517, 4526, 4611–4612, and 4631–4636 of Title 12 of the United States Code.

Executive Order No. 12866 (Planning and Regulatory Review)

As an independent regulator, the FHFA is not subject to the order.

Executive Order No. 13132 (Federalism)

As an independent regulator, the FHFA is not subject to the order.

Louis R. Hancock