GSEs

The Federal Housing Finance Agency is suspending its ongoing review of new credit scoring models and will instead move forward with creating a regulatory framework for providers of alternative credit scores to apply and be evaluated for use by Fannie Mae and Freddie Mac.

Fannie Mae and Freddie Mac may need to tap into U.S. Treasury funds when they adopt CECL, a new accounting rule that makes companies set aside money upfront for expected loan losses.

A Fannie Mae test to handle the private mortgage insurance process for lenders may raise concerns that it's going outside the scope of its secondary market mission. But the effort reflects its mandate to explore new credit-risk transfer alternatives, a company executive said.

The Trump administration's plan to end the conservatorship of Fannie Mae and Freddie Mac marked its first effort to solve a problem left over from the financial crisis, but ultimately raised more questions than it answered.

The groups applauded a proposal to establish minimum GSE capital requirements, but called for more immediate steps to release the companies from conservatorship.