Is the Federal Housing Finance Board's newest regulation a wise one?

One of the most controversial elements delaying GSE reform legislation is the provision in the billthat would direct 5% of Fannieand Freddieprofits to an affordable-housing fund.

The Federal Home Loan Bank (FHLB) System is a government-sponsored enterprise consisting of twelve cooperatively owned institutions that are regulated by the Federal Housing Finance Board. Shares in the individual FHLBs are owned exclusively by banks, savings institutions, credit unions, and insurance companies. Like Fannie Mae and Freddie Mac, FHLB...

This is the third and last conference on two complementary plans for the privatization of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and the creation of a new more competitive and more efficient system for financing housing in the United States. As a result of the comments...

Even though the house prices on which debt was built have disappeared, the debt is still with us as a debt overhang, or better, hangover.

We need better housing finance structures and ideas: The timing of the covered bond bill is certainly appropriate.

The SFRC urges the Federal Housing Finance Board to require thatFHLB accounting statements recategorize excess stock as a form of debt. Moreover, studying this issue has convinced the SFRC that a piecemeal approach to restructuring capital requirements for the FHLBs is inadequate. The entire structure of capital management across the FHLB system needs a thorough overhaul.

This statement is also available here as an Adobe PDF.

Statement No. 251For Information Contact:Paul M. Horvitz713-780-3771Peter J. Wallison202-862-5864

The subprime mortgage crisis has brought to light several policy issues associated...