Fannie Mae-No Politics (FNMA)

[JOoa0ky]

"In May, the FHFA released a new proposed regulatory capital framework for the GSEs that is expected to require us to hold significantly more capital than the rule proposed in June of 2018. While the re-proposed rule maintains a mortgage-risk-sensitive framework, it includes additional requirements that increase the minimum leverage-based capital, require capital buffers that can be drawn down in periods of financial stress, impose minimum percentages or floors on risk-weighted exposures and on retained portions of credit risk transfer transactions and provides less capital relief for credit risk transfer activities than under the 2018 proposal.

We believe the new proposed capital rule could have significant consequences for our business model, capital planning and ability to attract private investment if implemented as currently proposed. We plan to submit a public comment letter with our recommendations for the final rule.

Finally, as you are aware, we announced last month that we retained Morgan Stanley as our underwriting financial adviser to assist in development of a recapitalization plan that is critical – a critical input into our FHFA directed transition out of conservatorship. The Morgan Stanley team, along with our legal counsel, Sullivan & Cromwell, has been integrated into our process. We plan to continue to work closely with FHFA to develop and implement a responsible and viable approach that enables us to exit conservatorship."



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Fannie earnings call. I assume freddie should follow suit?