Fannie Mae-No Politics (FNMA)

[jacklanvo99]

"To put a more effective floor under short-term interest rates, the Federal Reserve created supplementary tools to be used as needed. For instance, the OverNight Reverse RePurchase agreement (ON RRP) facility is available" to money-market funds [like Vanguard's], government-sponsored enterprises [like Fannie Mae's], broker-dealers," as well as banks, "at a rate determined" by the Fed. Like IOER, ON RRP "discourages participating institutions from lending at a rate substantially below that offered by the Fed," which helps keep banks in business.

http://www.philly.com/philly/blogs/inq-phillydeals/Chair-Yellen-defends-the-Feds-handling-of-US-finance.html