Senator Warren Challenges Deregulatory Moves at Fed and Treasury

Senate Banking Committee Ranking Member Elizabeth Warren asked Fed Vice Chair for Supervision Michelle Bowman to withdraw a proposal that would weaken the supervisory rating framework for large banks; she also asked Treasury Secretary Scott Bessent to provide information on any reprivatization plans for Fannie Mae and Freddie Mac.

In her letter to Vice Chair Bowman, Senator Warren argued the proposal conflicts with the Bank Holding Company Act, which requires a satisfactory management rating for a firm to be deemed "well managed." She cautioned that the proposal would allow banks with unresolved deficiencies to operate unchecked while removing the presumption of enforcement, thereby heightening systemic risk. She urged the Fed to withdraw the plan, describing it as part of a broader deregulatory agenda that threatens financial stability.

In a letter to Treasury Secretary Scott Bessent, Senator Warren raised concerns that little information has been shared publicly on the Administration’s reported plans to reprivatize Fannie Mae and Freddie Mac. She said such an action would have major implications for the housing market, mortgage costs, and taxpayer protections and emphasized the need for transparency and congressional oversight. She asked Treasury to detail recent stakeholder roundtables, communications with the Federal Housing Finance Agency and the White House, related proposals, and any analyses on the potential impact of reprivatization on housing, markets, and taxpayers. She also pressed Treasury to explain how it would prevent higher borrowing costs or instability in housing finance and requested a response by October 8, 2025.