The Federal Housing Finance Agency today published a final rule requiring Fannie Mae and Freddie Mac to notify the agency in advance of new activities and obtain prior approval before launching new products. The rule states that FHFA will determine which new activities merit public notice and comment, and therefore must be treated as new products and subject to prior approval.
According to the final rule, a new activity is a business line, business practice, offering, or service by a CSE that requires new resources or policies; increases the scope of credit, market or operational risks of enterprises; or is a pilot or activity resulting from a pilot, according to FHFA. The rule also imposes a public disclosure requirement that the agency publish its decision on new activity and product submissions.
In a 2021 letter, the American Bankers Association welcomed efforts to bring more transparency and objectivity to the approval process for new products that the GSEs offer, but it recommended that the FHFA develop more detailed criteria for determining what constitutes new activity. incorporated into the final rule.