Amid stated aims by the Trump administration to issue public shares of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, calls for transparency by Senate Democrats have thus far gone unheeded by administration officials involved in the process.
In a letter dated Oct. 7 and published on his personal X account Wednesday, Federal Housing Finance Agency (FHFA) Director Bill Pulte said Sen. Elizabeth Warren, D-Mass., ranking member of the Senate Committee on Banking, Housing and Urban Affairs, “needs to get her facts straight,” in response to a letter she and colleagues addressed to members of the Federal Housing Finance Oversight Board, chaired by Pulte, on June 16.
The board referenced in Warren’s letter is an advisory panel comprised of the FHFA director, the secretaries of the U.S. Department of the Treasury and Department of Housing and Urban Development, and the chair of the Securities and Exchange Commission.
Established through the Housing and Economic Recovery Act of 2008 — legislation passed in response to the 2008 financial crisis — the board’s mandate includes advising the FHFA director and providing an annual assessment to Congress on the operations and performance of FHFA-regulated entities, including Fannie and Freddie.
Ahead of a scheduled June 17 meeting of the board, Warren and Democratic senators Chuck Schumer, Andy Kim, Ron Wyden, Raphael Warnock and Mazie Hirono wrote in their June 16 letter that “the public would benefit from your agencies proactively releasing information about the June 17th meeting, including a pre-meeting agenda and meeting minutes that include attendees.”
Doing so, they claim, “would demonstrate your commitment to promoting Board transparency and accountability, especially given that the Board has not met since 2017.” They requested such materials be provided no later than June 20.
Pulte’s Oct. 7 response — addressed to Warren directly and dated nearly four months after her initial June 16 request for information — claims “the Board has indeed held regular meetings on a quarterly basis” since the 2017 period Warren and her colleagues referenced. “Furthermore,” Pulte writes, “the Act does not require the Board to publish information related to its meetings.”
The FHFA director’s letter does not address any of the other particulars mentioned in the June 16 letter from Senate Democrats. It included seven questions related to a potential initial public offering (IPO) for Fannie Mae and Freddie Mac, the answers to which they said would “help Congress better understand your agencies’ approach toward reprivatization of the Enterprises.” The questions are below, shortened for concision:
- What proposals, advice or other information, if any, have your agencies discussed regarding the status or reprivatization of the Enterprises?
- What proposals, advice or other information, if any, have your agencies discussed with the White House regarding the status or reprivatization of the Enterprises?
- What analyses, if any, have your agencies conducted to assess the potential effects of removing the Enterprises’ explicit federal guarantees on: mortgage rates, multifamily housing production, housing costs, investor confidence and market liquidity?
- What analyses, if any, have your agencies conducted to assess the potential effects of reprivatizing or altering the status of the Enterprises on the Federal Housing Administration or Ginnie Mae?
- What analyses, if any, have your agencies conducted regarding the sale of Treasury’s senior preferred stocks, or otherwise making changes to the Treasury’s Senior Preferred Stock Purchase Agreements, including how proceeds may be used?
- How do your agencies plan to ensure that mortgage and multifamily lending costs do not rise if the Enterprises are reprivatized or released from conservatorship?
- How will the Administration guarantee compliance with consumer protections, civil rights and other relevant laws, including preserving the Affordable Housing Goals and Duty to Serve requirements, if the Enterprises are released from conservatorship?
Since President Donald Trump first announced an inkling for an IPO for Fannie and Freddie, major U.S. banks like JPMorgan Chase, Goldman Sachs and Bank of America have jockeyed for a role in bringing the massive mortgage investors public.
It remains unclear if Fannie and Freddie would remain under the conservatorship of the FHFA, though. When Trump first hinted he was considering an IPO for Fannie and Freddie in a May social media post, he noted, “I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President.”
In a late July interview with Scotsman Guide, Pulte said taking the companies public while keeping them under federal control remains a possibility, though he declined to provide specifics of the behind-the-scenes deliberations.
In early September, a consortium of 46 independent mortgage banks co-signed a letter drafted by the Community Home Lenders of America, an advocacy group serving mostly small and midsize mortgage lenders, opposing any IPO-induced merger of Fannie and Freddie, and also advising against any additional GSE charters for major Wall Street institutions.
In closing his Oct. 7 response to Warren, Pulte said his agency “welcomes all dialogue” on the issue of Fannie and Freddie conservatorship, “including perspectives from Members of Congress and other important stakeholders on how to achieve the shared goal of a safer and more affordable housing ecosystem that protects U.S. taxpayers.”
Pulte suggested Warren or her staff should contact the agency with questions they have.
