Federal Housing Finance Agency: Enterprise Regulatory Capital Framework—Prescribed Leverage Buffer Amount and Credit Risk Transfer

B-334117

March 22, 2022

The Honorable Sherrod Brown
Chairman
The Honorable Patrick J. Toomey
Ranking Member
Committee on Banking, Housing, and Urban Affairs
United States Senate

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

Subject:  Federal Housing Finance Agency: Enterprise Regulatory Capital Framework—Prescribed Leverage Buffer Amount and Credit Risk Transfer

Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Federal Housing Finance Agency (FHFA) entitled “Enterprise Regulatory Capital Framework—Prescribed Leverage Buffer Amount and Credit Risk Transfer” (RIN:  2590-AB17).  We received the rule on March 1, 2022.  It was published in the Federal Register as a final rule on March 16, 2022.  87 Fed. Reg. 14764.  The effective date is May 16, 2022.

The final rule, according to FHFA, amends the Enterprise Regulatory Capital Framework (ERCF) by refining the prescribed leverage buffer amount and credit risk transfer securitization framework for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.  FHFA also stated that the rule makes technical corrections to various provisions of the ERCF that was published on December 17, 2020. 

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

Shirley A. Jones
Managing Associate General Counsel

Enclosure
cc:  Clinton Jones
  General Counsel
  Federal Housing Finance Agency

ENCLOSURE

REPORT UNDER 5 U.S.C. § 801(a)(2)(A) ON A MAJOR RULE
ISSUED BY THE
FEDERAL HOUSING FINANCE AGENCY
ENTITLED
“ENTERPRISE REGULATORY CAPITAL FRAMEWORK—
PRESCRIBED LEVERAGE BUFFER AMOUNT
AND CREDIT RISK TRANSFER”
(RIN:  2590-AB17)

(i) Cost-benefit analysis

The Federal Housing Financing Agency (FHFA) did not discuss the costs and benefits in the final rule.  In its submission to us, FHFA indicated that it considered preparation of an analysis of the costs and benefits of this rule to be not applicable.

(ii) Agency actions relevant to the Regulatory Flexibility Act (RFA), 5 U.S.C. §§ 603–605, 607, and 609

FHFA certified that the final rule will not have a significant economic impact on a substantial number of small entities because the rule applies to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, which are not small entities for purposes of the RFA.

(iii) Agency actions relevant to sections 202–205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. §§ 1532–1535

As an independent regulatory agency, FHFA is not subject to the Act.

(iv) Other relevant information or requirements under acts and executive orders

Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.

On September 27, 2021, FHFA published a proposed rule.  86 Fed. Reg. 53230.  FHFA received 89 public comment letters on the proposed rule from a variety of interested parties, including private individuals, trade associations, consumer advocacy groups, think-tanks and institutions, and financial institutions.  FHFA responded to comments in this final rule.

Paperwork Reduction Act (PRA), 44 U.S.C. §§ 3501–3520

FHFA determined the final rule does not contain any information collection requirements that would require the approval of the Office of Management and Budget under the PRA.

Statutory authorization for the rule

FHFA promulgated this final rule pursuant to sections 4511, 4513, 4513b, 4514, 4515, 4517, 4526, 4611–4612, and 4631–36 of title 12, United States Code.

Executive Order No. 12866 (Regulatory Planning and Review)

As an independent regulatory agency, FHFA is not subject to the Order.

Executive Order No. 13132 (Federalism)

As an independent regulatory agency, FHFA is not subject to the Order.