On April 26, 2023, the Federal Housing Finance Agency (“FHFA”) published a Notice of Proposed Rulemaking in the Federal Register, seeking comments on a proposed rule that would codify into regulations some of the agency’s existing practices related to fair lending, fair housing and Equitable Housing Finance Plans.
The proposed rule seeks to add regulations for:
- FHFA’s fair lending oversight requirements for Fannie Mae and Freddie Mac (the “GSEs”) and the Federal Home Loan Banks (“Banks”). In addition to the current practices of conducting supervisory examinations, the proposed rule would expand the FHFA’s oversight of potential unfair or deceptive acts or practices by the regulated entities.
- The requirement for the GSEs to maintain Equitable Housing Finance Plans. The proposed rule would expand program requirements and add public disclosure and reporting requirements.
- Codifying the required use of the Supplemental Consumer Information Form (“SCIF”) by requiring the GSEs to collect, maintain, and report data on language preference, homeownership education, and housing counseling for applicants and borrowers.
- Expanding requirements for the GSEs to provide greater transparency and oversight regarding the Equitable Housing Finance Plans. The proposed rule would add definitions for an “annual plan update, ” “performance report,” and “underserved community” among others. The definitions focus on the GSEs actions, products, and policies.
The proposed rule provides examples of how FHFA’s compliance and enforcement authority could be applied with respect to fair lending oversight, equitable housing finance and reported. For example, if the GSEs do not meet Equitable Housing Finance Plan requirements, FHFA could issue an adverse examination finding, and ultimately issue a prudential management operating standard notice requiring an entity to submit to a corrective plan.
FHFA Director Sandra L. Thompson showed support for the proposed rule by stating, “Challenges and barriers continue to limit sustainable housing opportunities for minority, low-income, and senior borrowers, as well as families living in rural areas and on tribal land. The proposed rule will help FHFA ensure that our regulated entities operate in a safe and sound manner as they comply with fair housing laws and serve the publish interest”
FHFA advised that all comments will be taken under review prior to issuing a final rule. Comments must be received no later than June 26, 2023 and will be available for review on the FHFA website.
