The Federal Housing Finance Agency (FHFA) rescinded guidance establishing expectations for the government-sponsored enterprises (GSEs) and the Federal Home Loan Banks (FHLBanks) regarding unfair or deceptive acts or practices (UDAP) as outlined in Section 5 of the Federal Trade Commission Act (FTC Act).
The mortgage industry expressed concerns about the guidance, Advisory Bulletin 2024-06, titled “Regulated Entity Unfair or Deceptive Acts or Practices Compliance,” when it was issued in November last year.
“The November bulletin’s specific expectations for Fannie Mae and Freddie Mac to conduct consumer protection oversight of their customers wrongly established the GSEs as compliance regulators, was duplicative of federal and state regulatory oversight of UDAPs, and would have negatively impacted consumers and lenders through higher costs,” Mortgage Bankers Association President and CEO Bob Broeksmit said in a statement commending the rescission. “Common sense regulation and oversight is crucial to ensuring that the GSEs operate in a safe and sound manner that allows them to continue their pivotal role in providing affordable homeownership and rental housing opportunities for all Americans.”
The rescission letter noted that FHFA is not the primary administrator of the statutory provisions prohibiting unfair or deceptive acts or practices. Rather, FTC holds the primary authority to enforce and interpret the FTC Act, including defining unfair or deceptive acts or practices.
The guidance is one of five advisory bulletins rescinded so far as part of a broader initiative by FHFA Director Bill Pulte to reevaluate certain policies implemented during the previous administrations, reflecting a shift in the Trump administration’s regulatory approach.