The Federal Housing Finance Agency today published a final rule that requires Fannie Mae and Freddie Mac to provide advance notice to the agency of new activities and obtain prior approval before launching new products. The rule establishes that FHFA will determine which new activities merit public notice and comment, and therefore should be treated as new products and subject to prior approval.
A new activity under the final rule is a business line, business practice, offering or service by either GSE that requires new resources or policies; increases the scope of credit, market or operational risk to the enterprises; or is a pilot or an activity resulting from a pilot, according to FHFA. The rule also establishes a public disclosure requirement for the agency to publish its determinations on new activity and product submissions.
In a 2021 letter, the American Bankers Association welcomed the effort to bring greater transparency and objectivity to the approval process for new products offered by the GSEs, although it recommended that FHFA develop more detailed criteria for determining what constitutes a new activity, which the agency incorporated into the final rule.