Fannie Mae-No Politics (FNMA)

[familymang]

As a practical matter, wouldn't it be better to have a buffer above the LC, RBC, PLBA, and PCCBA to assure investors that any return of capital via dividends is sustainable long term?

You are pretty much asking for a BUFFER on top of the BUFFERS (PLBA, PCCBA). AKA bufferception. Seems kind of excessive doesnt it? We already know ~2.5% capital requirement is safe and sound, the PLBA max buffer adds 0.3%-0.5% to that, and the PCCBA buffer adds 1.4%-1.7% to that. Why would you advocate for an additional buffer on top of those buffers? Why stop there, why not a buffer ontop of the buffers for the buffers as well.

(1) This is a leftover idea from Mark Calabria and reflects the previous administrations thinking, especially as it relates to the urgency of release from the CONservatorship.

This was finalized in the new capital rule by Sandra Thompson, if she wanted to change it like other parts of the capital rule she amended she had the power to do so.