The Financial Stability Oversight Council – whose members include Treasury Secretary Jacob Lew, Consumer Financial Protection Bureau Director Richard Cordray and other top regulators – released its annual report last week. In the report, the DSOC said that Congress needed to take the lead on housing finance reform in order to grant stability to the housing finance system, HousingWire reported.
“While regulators and supervisors have taken great strides to work within the constraints of conservatorship to promote greater investment of private capital and improve operational efficiencies with lower costs, federal and state regulators are approaching the limits of their ability to enact wholesale reforms that are likely to foster a vibrant, resilient housing finance system,” the FSOC stated. “Housing finance reform legislation is needed to create a more sustainable system that enhances financial stability.”
The FSOC noted that its constituent regulators had made progress on housing finance reform, pointing out changes to mortgage regulations and the reduction of Fannie Mae and Freddie Mac’s retained portfolios by more than 50% of their 2008 levels.
But Congress needs to do its part, the FSOC insisted.
“Notwithstanding the progress, the GSEs are now into their eighth year of conservatorship,” the FSOC stated.
Leaders of the government’s top regulatory agencies are urging Congress to take on housing finance reform, saying that they are “approaching the limits” of their ability to act under the current system, according to a HousingWire report.