Fannie Mae-No Politics (FNMA)

[Rodney5]

Stockanalyze, government agencies do not make laws. Congress made the law. FHEFSSA is law. The FHFA / Treasury cannot just up and decide to change the Law.

As pointed out on this board the suspension of capital classifications did not affect the Restriction on Capital Distributions,

To stay within Congressional Law governing the Enterprises the Jury award will have to be collected after the companies are adequately capitalized. IF NOT the FHFA will violate the law yet again just as the FHFA has numerous violations already.

THE LAW

Code of Federal Regulation

1237.12 Capital distributions while in conservatorship.

(a) Except as provided in paragraph (b) of this section, a regulated entity shall make no capital distribution while in conservatorship.

(b) The Director may authorize, or may delegate the authority to authorize, a capital distribution that would otherwise be prohibited by paragraph (a) of this section if he or she determines that such capital distribution:

No 1: Will enhance the ability of the regulated entity to meet the risk-based capital level and the minimum capital level for the regulated entity;

No 2: Will contribute to the long-term financial safety and soundness of the regulated entity;

No 3: Is otherwise in the interest of the regulated entity; or

No 4: Is otherwise in the public interest.

Section c, this section is intended to supplement and shall not replace or affect any other restriction on capital distributions imposed by statute or regulation.


DID THE NET WORTH SWEEP

Enchance the ability to meet risk-based capital level? NO

Contribute to the long-term financial safety and soundness of the regulated entity? NO

In the interest of the regulated entity? NO

Is otherwise in the public interest? NO
(The taxpayers are responsible for the liabilities of the enterprises).

The Net Worth Sweep could not possibly have any rehabilitative effect and that one of the principal duties of the FHFA Director is to preserve and conserve assets.

Fannie is allowed to retain its earnings until it fully meets its applicable risk-based capital requirement (it’s currently short by $247.8 billion), but those increased retained earnings are matched by a dollar-for-dollar increase in Treasury’s liquidation preference.

https://gov.ecfr.gov/current/title-12/chapter-XII/subchapter-B/part-1237/subpart-D/section-1237.12