Calabria Delays Release of Re-Proposed Capital Rule
Despite the long delay, Calabria suggested the new version of the capital rule might not look so different from the version proposed under the previous director, Mel Watt.
However, he did tell Exchequer Club members to expect considerably more emphasis on risk-based capital standards.
Calabria suggested his version will include
“a lot more detailed on the mortgage side than you see on the banking side.”
The Federal Housing Finance Agency midweek added one more layer of uncertainty to the financial turmoil surrounding the coronavirus crisis, quietly announcing that it will delay the release of a new capital rule for Fannie Mae and Freddie Mac.
FHFA Director Mark Calabria was widely expected to release the new rule for public comment during a speech before the Washington Exchequer Club on Wednesday. However, in response to the COVID-19 scare, Calabria issued a very different comment via conference call, announcing the FHFA would be the first federal regulatory agency to hit pause on a rulemaking due to the virus.
The main reason for the delay, the director said, was that social distancing issues make it more difficult to allow the public adequate opportunity to comment on the re-proposed rule. "We're delaying the opening of the comment period until we have some certainty on what the current overall situation is," he added.
But Calabria did use the Exchequer Club event to provide a sneak-peak at the new rule, which he said should be released by the end of May.
Despite the long delay, Calabria suggested the new version of the capital rule might not look so different from the version proposed under the previous director, Mel Watt. However, he did tell Exchequer Club members to expect considerably more emphasis on risk-based capital standards.
Calabria suggested his version will include “a lot more detailed on the mortgage side than you see on the banking side.”
