ABA Weighs-In on New FHFA Strategic Plan
The American Bankers Association ("ABA") offered recommendations in support of the Federal Housing Finance Agency ("FHFA") proposed Strategic Plan for Fiscal Years 2026-2030, including urging a stronger emphasis on proportional oversight based on an institution's size and complexity.
In a letter to FHFA Director William Pulte, the ABA reviewed the FHFA's three stated goals: (i) overseeing Fannie Mae and Freddie Mac, (ii) supervising the Federal Home Loan Bank System, and (iii) efficiently managing FHFA operations.
On:
- Oversight of Fannie Mae and Freddie Mac. The ABA urged the FHFA to avoid raising participation costs for smaller banks through new supervisory or capital standards.
- Supervision of the Federal Home Loan Bank System. The ABA emphasized that the FHFA must maintain reliable and affordable funding for community banks that depend on FHLBank advances. The association urged the withdrawal of 2024 guidance requiring FHLBanks to revise member credit ratings, citing funding uncertainty, and recommended expanding Affordable Housing Program grants to support local builders and address housing supply shortages.
- Efficient Management of FHFA Operations. The ABA encouraged the FHFA to minimize compliance costs as it modernizes technology and data frameworks.
- Cross-Cutting Themes and Bank Interests. The ABA called for proportional standards based on institution size and complexity while leveraging community banks’ local expertise.
The ABA also stressed that the plan should recognize the vital role of community and regional banks in sustaining competition and access to housing finance, cautioning that untailored supervisory standards could disadvantage smaller institutions.
On implementing the plan, the ABA recommended that FHFA (i) prioritize stakeholder engagement, (ii) include a small bank participation assessment for major policy changes, (iii) promote transparency through clear timelines and guidance, (iv) coordinate with other regulators to avoid duplication, (v) support accessible technology and shared data platforms, and (vi) continuously assess burden-to-risk trade-offs to maintain proportional and effective regulation.