Replies to post #605181 on Fannie Mae-No Politics (FNMA)

[kthomp19]

That is very true

Actually it isn't. Core capital has a specific definition in HERA, and directly affects the capital classification that the FHFA director places on FnF.

See various references to core capital in 12 USC 4614 and the defintion of core capital in 12 USC 4502(7).

unfortunately all the recent "buzz" about the capital rule has been talk about imposing "bank like" capital standards for fannie and freddie.

Opponents have been pressing for them to be held to the same standard as banks.

This is a completely different discussion. FnF's current (greatly negative) core capital level doesn't have anything to do with "bank-like" capital standards.

This is also why Tim Howard has been saying, depending on what the capital requirement % is will let us all know which direction the administration intends to take us.

I do agree with this.

[bcde]

"That is very true... unfortunately all the recent "buzz" about the capital rule has been talk about imposing "bank like" capital standards for fannie and freddie.

Opponents have been pressing for them to be held to the same standard as banks."

It is against insurance industry regulations to impose fixed capital (core capital) requirements on insurance companies like FnF. Imposing fixed capital like core capital requirements hurts consumers with higher fees and puts investors and economy at greater risk.

"The insurance industry began using risk-based capital instead of fixed-capital standards in the 1990s after a string of insurance companies became insolvent in the 1980s and 1990s."

FHFA needs to understand that it is regulating insurance companies (FnF) and not banks. Banks are regulated by other regulators and not FHFA. Some one needs to make sure that Calabria understands the basics of insurance business before he starts with another loose talk.

If FHFA wants to impose fixed capital like core capital on FnF then FnF should be allowed to do all businesses that banks are allowed.