Thompson: Congress Must Determine Future of Fannie, Freddie

Federal Housing Finance Agency Acting Director Sandra Thompson, President Biden’s nominee to lead the agency on a permanent basis, today told lawmakers that Congress must determine whether and how Fannie Mae and Freddie Mac will exit conservatorship. “The end state of the enterprises is something that Congress would have to legislate,” Thompson said during a nomination hearing before the Senate Banking Committee. She added that she would “commit to positioning the enterprises and working with Congress to do whatever’s necessary to move them out of conservatorship in a responsible timeframe.”

Thompson also emphasized the importance of the GSEs’ credit risk transfer program, noting that Fannie and Freddie “don’t have enough capital to sustain a severe event.”

“It is important for us to continue to encourage the credit risk transfer program so that the taxpayers are not on the hook for any extreme events,” she said. “We just believe that it is critical for enterprises, especially while they’re under-capitalized, to continue to transfer credit risk away from the taxpayers and into the hands of private investors.”