Fannie Mae (FNMA)

[kthomp19]

In a nutshell I am saying that every Quarterly NWS violated The Charter Act. The Charter Act prohibits a capital distribution as defined by the 3rd amendment to the SPSPA unless prior written approval of the Director of FHFA is obtained. This is an enumerated statutory responsibility of the director.

Unfortunately FHFA circumvented this legal argument all the way back in 2008. They suspended all capital classifications otherwise mandated by HERA while FnF are in conservatorship. This was codified in 12 CFR 1237.3(c):

(c) Powers as conservator or receiver. The Agency, as conservator or receiver, shall have all powers and authorities specifically provided by section 1367 of the Safety and Soundness Act and paragraph (a) of this section, including incidental powers, which include the authority to suspend capital classifications under section 1364(e)(1) of the Safety and Soundness Act during the duration of the conservatorship or receivership of that regulated entity.

1) No capital distribution can result in FnF being classified as "undercapitalized", "significantly undercapitalized", or "critically undercapitalized" because those classifications don't apply while FnF are in conservatorship.

In addition:

2) The Director may well have given written approval of every NWS payment anyway. I'm not aware of any requirement for such approval to be made public.
3) No capital rule, with risk-based and minimum capital levels established by the Director, was finalized until Calabria's in 2020. By that point FnF had stopped making cash NWS payments.
4) As The Man With No Name just posted, the FHFA director signed the NWS. That can easily be interpreted as blanket written approval for all payments made pursuant to it.

Sorry, but I think this particular legal avenue is a dead end.