FHFA issues proposed rule on suspended counterparty program 

The Federal Housing Finance Agency is seeking feedback on a proposed rule to amend the Suspended Counterparty Program regulation.

The SCP requires FHFA’s regulated entities to submit a report to FHFA if the entity becomes aware that an individual or institution with which it does business has been found to have committed certain forms of misconduct within the past three years. It also authorizes FHFA to issue orders directing the agency’s regulated entities to cease or refrain from doing business with certain counterparties, subject to terms as provided in the orders. 

According to the notice of proposed rulemaking released today, the new rule would authorize the suspension of business between regulated entities and counterparties found to have committed misconduct in the context of civil enforcement actions or that have committed criminal or civil misconduct in connection with the management or ownership of real property. The rule also would authorize FHFA to, immediately and without first issuing a proposed suspension order, suspend business where the misconduct has resulted in debarment, suspension or limited denial of participation imposed by a federal agency.

Comments are due within 60 days of publication in the Federal Register.