The Federal Housing Finance Agency (FHFA) released a new
final rule codifying the agency’s fair lending oversight requirements for the
secondary mortgage market. The rule is the culmination of the government-sponsored
enterprises’ (GSEs) progress since 2022 on policies to ensure all borrowers and
renters have access to fair, sustainable and equitable housing opportunities,
according to an agency press release.
The “Fair Lending, Fair Housing, and Equitable Housing
Finance Plans” final rule incorporates elements of Fannie Mae and Freddie Mac’s
Equitable Housing Finance Plan updates for 2024 and performance reports for
2023, the agency noted.
“As we reflect on the significance of Fair Housing Month,
FHFA and its regulated entities will continue to address barriers that make
affordable housing difficult to find,” FHFA Director Sandra Thompson said in
the release. “These initiatives are critically important at a time when housing
affordability remains a persistent challenge.”
The final rule addresses stakeholder concerns, such as whether
the rule’s provisions codifying compliance with the statutory prohibition
against unfair and deceptive acts and practices (UDAP) would have unintended
consequences for primary mortgage market lenders. One commenter contended that
because the regulated entities do not interact with consumers in the same way
as other lenders, UDAP compliance requirements would be inappropriate.
“FHFA considered these comments and determined that the
proposed provisions are necessary to carry out its statutory duties and
purposes and the benefits of codifying FHFA’s oversight of regulated entity
UDAP compliance in regulation otherwise outweigh commenters’ concerns,” the
final rule states. “The broad language of Section 5 of the FTC Act prohibits ‘unfair
or deceptive acts or practices in or affecting commerce,’ which would encompass
activities of FHFA’s regulated entities.”
The rule further notes the Safety and Soundness Act requires
the FHFA to oversee its regulated entities for compliance not only with the
purposes of the act and the authorizing statutes, but also with “any other
applicable law,” and to engage in enforcement for noncompliance with law.
“FHFA does not expect the final rule will impact primary
market lenders, as they are already subject to UDAP compliance requirements
from the other federal financial regulators, including the Consumer Financial
Protection Bureau and the Federal Trade Commission,” the final rule states. “This
final rule does not apply to primary market lenders and FHFA’s enforcement and
supervision would be limited to its own regulated entities.”
The GSEs have served nearly 2.6 million families under the GSEs’
plans by educating consumers, reducing closing costs, introducing innovation
into underwriting and combating appraisal bias, the release notes. Fannie Mae
and Freddie Mac also proposed new actions for 2024, including an increased
focus on promoting homeownership for first-generation homebuyers.
FHFA also said it plans to seek public feedback to inform
the next three-year performance plans through a request for input and
listening session. FHFA expects to hold a public listening session in June, and
anticipates releasing the next set of plans in January 2025.