Fannie Mae-No Politics (FNMA)

[Wise Man]

Expenses can be capital distributions, if they don't surge as a result of operations and, secondly, it's been expressly determined so through regulation, as required in the statutory definition of capital distributions, which is what the FHFA did in the famous July 20, 2011 Final Rule, amending the number 3 to include this case of payment of Securities Litigation judgments.
It's not about the money. The key is that the Lamberth rebate has uncovered the other 2 capital distributions during conservatorship that have gone through, despite being restricted. And this is why we apply them towards the exceptions to the restriction to legalize them, thanks to the FHFA-C's Incidental Power that allows this rogue Agency to mislead and mess around, if the endgame is "authorized by this section" (Rehabilitation).
A Separate Account.

An expense ends up reducing the Net Income in the Income Statement, which is later posted on the Balance Sheet (actual picture of a company) in the Accumulated Retained Earnings account, in turn, recorded as regulatory capital (Core Capital and CET1) and thus, it affects the Capital levels.

This is why it's restricted when FnF are undercapitalized (IN GENERAL). A restriction means that FnF keep it. So, don't just stop with "restriction".
The corrupt litigants rather see their dividend suspended in the Treasury's coffers (not only by covering up this Restriction on Capital Distributions, but also defending the payment of a 10% dividend to UST. The cover up the original low cost UST backup of FnF at rates similar to Treasuries and, secondly, they conceal that there were no Earnings available for distribution as dividend, out of Accumulated Deficit Retained Earnings accounts. Evidence that what FnF sent to Treasury were assessments in the form of capital distributions, not actual dividends), than kept by FnF for their recapitalization, in order to increase their capital needs expecting stock offerings at rigged prices down the road and the assault on the ownership.
This is why all the investment banks, hedge funds and private equity firms are stuck to Fanniegate like parasites: Hindes, Bill Ackman, Fairholme, Perry Capital, Pagliara, JPM and Morgan Stanley ("underwriter advisors" selected by Freddie Mac and Fannie Mae, respectively)and the known sponsors of the Moelis Plan, BX and John Paulson.
Also, all the Wall Street law firms (Jones Days with the controversial former DOJ attorney Mooppan, etc.) or attorneys hired by them, like Bryndon Fisher, Joshua Angel, Hamish Hume, etc, that look more like mercenaries. Just read this comment by the controversial Bryndon Fisher proposing a settlement of the Collins case before the Oral Arguments at the SCOTUS, in exchange for a large sum of money just for their attorneys.
He is scheduled to file illegally a third appeal in the CFC case tomorrow, when his case has already been dismissed.

It was explained by the FHFA in the preface of the Final Rule where the Lamberth rebate was expressly included in the definiton of capital distribution (July 20, 2011) and also I remind you that it's when it was enacted another exception to the Restriction on Capital Distributions -12 CFR 1237.12- : A capital distribution (deplete capital) for .......wait for it.........for their recapitalization (build capital). A Separate Account wording suitable for the moment that the prior exception by statute, had reduced all the SPS outstanding (12 U.S. Code 4614 (e)). The FHFA needed another exception to keep on rolling the Separate Account plan. In either of the new 4 exceptions, it means "for Recap.", because it supplemented the restriction by statute (restricted for Recap as well). A follow-on plan.

PROHIBITED at a time of compliance with the Agency's statutory goal: the rehabilitation of FnF.

So, capital distribution isn't just taking the capital away directly from the capital stack (through dividend payments, handing out stocks or SPS LP for free to Treasury, reduction of SPS, stock buybacks,...)