IG: Thanks to the FHFA, Fannie and Freddie Have a Spending Problem
By Carisa Chappell
The Inspector General of the Federal Housing Finance Agency in a new report says spending by the GSEs exploded after their budgetary authority was yanked away from them by the regulator in 2013.
The increase in spending actually came while the two were under a mandate to shrink – an order that is still in place today.
According to the report, Fannie Mae and Freddie Mac had a combined budget of $5.1 billion in fiscal 2015, a 31 percent increase over 2012 spending. The IG notes the GSEs set their own budgets from 2009 to 2012, but then the FHFA rescinded that authority “and determined to require review and approval of the enterprises’ annual budgets” to help align their “strategic direction…”
Further, the IG says the regulator’s budget reviews and approval process have "imposed virtually no budget control on the enterprises.” In his rebuttal to the IG’s findings, FHFA Acting Deputy Director of Conservatorships Bob Ryan concurs with some of the IG’s recommendations but takes issue with other aspects of the report. For the full story, see the next edition of Inside The GSEs, out later this week.