Proposed Rule2025-14183
Fair Lending, Fair Housing, and Equitable Housing Finance Plans
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 28, 2025
Issuing agencies
Federal Housing Finance Agency
Abstract
The Federal Housing Finance Agency ("FHFA" or the "Agency") is requesting comment on the notice of proposed rulemaking repealing the Fair Lending, Fair Housing, and Equitable Housing Finance Plans regulation.
Full Text
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<title>Federal Register, Volume 90 Issue 142 (Monday, July 28, 2025)</title>
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[Federal Register Volume 90, Number 142 (Monday, July 28, 2025)]
[Proposed Rules]
[Pages 35475-35483]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14183]
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FEDERAL HOUSING FINANCE AGENCY
12 CFR Part 1293
RIN 2590-AB53
Fair Lending, Fair Housing, and Equitable Housing Finance Plans
AGENCY: Federal Housing Finance Agency.
ACTION: Notice of proposed rulemaking; repeal of 12 CFR part 1293.
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SUMMARY: The Federal Housing Finance Agency (``FHFA'' or the
``Agency'') is requesting comment on the notice of proposed rulemaking
repealing the Fair Lending, Fair Housing, and Equitable Housing Finance
Plans regulation.
DATES: FHFA will accept written comments on the proposed rule on or
before September 26, 2025.
ADDRESSES: You may submit your comments on the proposed rule,
identified by regulatory information number (RIN) 2590-AB53, by any one
of the following methods:
<bullet> Agency Website: <a href="https://www.fhfa.gov/regulation/federal-register?comments=open">https://www.fhfa.gov/regulation/federal-register?comments=open</a>.
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
Follow the instructions for submitting comments. If you submit your
comment to the Federal eRulemaking Portal, please also send it by email
to FHFA at <a href="/cdn-cgi/l/email-protection#184a7d7f5b7775757d766c6b587e707e79367f776e"><span class="__cf_email__" data-cfemail="c290a7a581adafafa7acb6b182a4aaa4a3eca5adb4">[email protected]</span></a> to ensure timely receipt by FHFA.
Include the following information in the subject line of your
submission: Comments/RIN 2590-AB53.
<bullet> Hand Delivered/Courier: The hand delivery address is:
Clinton Jones, General Counsel, Attention: Comments/RIN 2590-AB53,
Federal Housing Finance Agency, 400 Seventh Street SW, Washington, DC
20219. Deliver the package at the Seventh Street entrance Guard Desk,
First Floor, on business days between 9 a.m. and 5 p.m.
<bullet> U.S. Mail, United Parcel Service, Federal Express, or
Other Mail Service: The mailing address for comments is: Clinton Jones,
General Counsel, Attention: Comments/RIN 2590-AB53, Federal Housing
Finance Agency, 400 Seventh Street SW, Washington, DC 20219. Please
note that all mail sent to FHFA via U.S. Mail is routed through a
national irradiation facility, a process that may delay delivery by
approximately two weeks.
FOR FURTHER INFORMATION CONTACT: Leda Bloomfield, Associate Director,
Office of Affordable Housing and Community Investment, (202) 649-3415,
<a href="/cdn-cgi/l/email-protection#460a23222768042a29292b202f232a2206202e202768212930"><span class="__cf_email__" data-cfemail="98d4fdfcf9b6daf4f7f7f5fef1fdf4fcd8fef0fef9b6fff7ee">[email protected]</span></a>; Clinton Jones, General Counsel, Office of
General Counsel, (202) 649-3006, <a href="/cdn-cgi/l/email-protection#0d4e61646379626323476263687e4d6b656b6c236a627b"><span class="__cf_email__" data-cfemail="4f0c2326213b2021610520212a3c0f2927292e61282039">[email protected]</span></a>. These are not
toll-free numbers. The mailing address is: Federal Housing Finance
Agency, 400 Seventh Street SW, Washington, DC 20219. For TTY/TRS users
with hearing and speech disabilities, dial 711 and ask to be connected
to any of the contact numbers above.
SUPPLEMENTARY INFORMATION:
I. Request for Comments
FHFA invites comments on all aspects of the proposed rule and will
take all comments into consideration before issuing a final rule.
Comments will be posted to the electronic rulemaking docket on the FHFA
public website at <a href="https://www.fhfa.gov">https://www.fhfa.gov</a>, except as described below.
Commenters should submit only information the commenter wishes to make
available publicly. FHFA may post only a single representative example
of identical or substantially identical comments, and in such cases
will generally identify the number of identical or substantially
identical comments represented by the posted example. FHFA may, in its
discretion, redact or refrain from posting all or any portion of any
comment that contains content that is obscene, vulgar, profane, or
threatens harm. All comments, including those that are redacted or not
posted, will be retained in their original form in FHFA's internal
rulemaking file and considered as required by all applicable laws.
Commenters that would like FHFA to consider any portion of their
comment exempt from disclosure on the basis that
[[Page 35476]]
it contains trade secrets, or financial, confidential or proprietary
data or information, should follow the procedures in section IV.D. of
FHFA's Policy on Communications with Outside Parties in Connection with
FHFA Rulemakings, at <a href="https://www.fhfa.gov/sites/default/files/documents/Ex-Parte-Communications-Public-Policy_3-5-19.pdf">https://www.fhfa.gov/sites/default/files/documents/Ex-Parte-Communications-Public-Policy_3-5-19.pdf</a>. FHFA cannot
guarantee that such data or information, or the identity of the
commenter, will remain confidential if disclosure is sought pursuant to
an applicable statute or regulation. See 12 CFR 1202.8 and 1214.2 and
the FHFA FOIA Reference Guide at <a href="https://www.fhfa.gov/about/foia-reference-guide">https://www.fhfa.gov/about/foia-reference-guide</a> for additional information.
II. Purpose of Proposed Rule Repealing 12 CFR Part 1293
Pursuant to Executive Order (``Executive Order'' or ``E.O.'')
14219, FHFA reviewed its regulations for consistency with law and
Administration policy.\1\ FHFA also reviewed existing FHFA regulations
with a goal of improving prudence and financial responsibility in the
expenditure of funds, from both public and private sources, alleviating
unnecessary regulatory burdens, avoiding confusion in roles and
responsibilities with other agencies having primary jurisdiction, and
avoiding duplicative statements of FHFA authorities. In furtherance of
these goals, FHFA proposes to repeal 12 CFR part 1293 (part 1293).
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\1\ 90 FR 10583 (February 25, 2025).
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III. Agency Authority To Repeal 12 CFR Part 1293
The Federal Housing Enterprises Financial Safety and Soundness Act
of 1992, as amended (12 U.S.C. 4501 et seq.) (``Safety and Soundness
Act''), authorizes FHFA to exercise general regulatory authority over
the Federal National Mortgage Corporation (``Fannie Mae''), the Federal
Home Loan Mortgage Corporation (``Freddie Mac''), and the Federal Home
Loan Banks (``FHLBanks'') (Fannie Mae and Freddie Mac collectively, the
``Enterprises;'' the Enterprises and the Banks collectively,
``regulated entities''), to ensure that the purposes of the Safety and
Soundness Act, the Fannie Mae Charter Act, the Freddie Mac Corporation
Act, and any other applicable law are carried out.\2\ The Safety and
Soundness Act also authorizes FHFA to issue, following notice and
comment requirements under the Administrative Procedure Act (``APA''),
any regulation necessary to carry out its duties with respect to the
Enterprises and to ensure that the purposes of the Safety and Soundness
Act, the Fannie Mae Charter Act, and the Freddie Mac Corporation Act
are accomplished.\3\ FHFA's rulemaking authority extends to amendment
or repeal of a regulation, including regulations that impose
unnecessary regulatory burdens.\4\ Additionally, part 1293 is not a
regulation mandated by statute, and FHFA has discretion to modify or
repeal as appropriate.
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\2\ 12 U.S.C. 4511(b).
\3\ 12 U.S.C. 4526(a) and (b) (requiring regulations to be
issued after notice and opportunity for comment pursuant to 5 U.S.C.
553).
\4\ The APA defines ``rule making'' as the ``agency process for
formulating, amending, or repealing a rule.'' 5 U.S.C. 551(5).
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IV. Regulatory Background
FHFA published its proposed regulation on Fair Lending, Fair
Housing, Equitable Housing Finance Plans on April 26, 2023 \5\ and its
final rule on May 16, 2024.\6\ FHFA determined the final rule to be a
major rule with an estimated annual impact on the economy in excess of
$100 million. FHFA was not required by statute to publish the
regulation. The regulation includes: (1) a requirement that each
regulated entity comply with the Fair Housing Act 42 U.S.C. 3601 et
seq., Equal Credit Opportunity Act (``ECOA'') 15 U.S.C. 1691 et seq.,
the fair housing provisions of the Safety and Soundness Act 12 U.S.C.
4545, and the prohibitions on Unfair or Deceptive Acts or Practices
(``UDAP'') under the Federal Trade Commission (``FTC'') Act, 15 U.S.C.
45; (2) a specific duty applying to directors serving on a regulated
entity board of directors relating to fair lending and UDAP compliance;
and (3) requirements relating to Enterprise equitable housing finance
planning. The regulation specifies that it does not establish any
third-party rights.
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\5\ 88 FR 25293 (April 26, 2023).
\6\ 89 FR 42768 (May 16, 2024). FHFA determined the final rule
to exceed the $100 million threshold in annual economic impact and
to qualify as a major rule under the Congressional Review Act, 5
U.S.C. 801 et seq. FHFA verified the determination with the Office
of Management and Budget, Office of Information and Regulatory
Affairs.
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V. Grounds for Repeal
A. Standard of Review for Regulatory Repeal
The APA requires a reviewing court to set aside agency action that
is, among other things, ``arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law'' or ``in excess of
statutory jurisdiction, authority, or limitations, or short of
statutory right.'' \7\ Agency actions subject to a court's review
include repeal of a regulation.\8\ FHFA's authority extends to
amendment or repeal of a regulation.\9\ FHFA proposes to repeal part
1293 to enhance prudence and financially responsible expenditure of
funds, from both public and private sources; alleviate unnecessary
regulatory burdens; avoid confusion about roles and responsibilities
relative to other agencies with primary statutory jurisdiction; avoid
redundant statements about FHFA authority; and align with
Administration policy. Modification or repeal of part 1293 is within
FHFA's discretion under its rule making authority.
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\7\ See 5 U.S.C. 706(2)(A) and (C).
\8\ See 5 U.S.C. 702 (judicial review of ``agency action'');
551(13) (``agency action'' includes an agency ``rule''); 551(5)
(``rule making'' is the agency process for formulating, amending, or
repealing a rule).
\9\ The APA defines ``rule making'' as the ``agency process for
formulating, amending, or repealing a rule.'' 5 U.S.C. 551(5).
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B. FHFA Alignment With Administration Policy
On February 19, 2025, the President issued Executive Order 14219
under which federal agencies are required to review all regulations
subject to their jurisdiction and repeal, as appropriate, regulations
inconsistent with law or policy.\10\ Administration policy includes the
policy to be ``prudent and financially responsible in the expenditure
of funds, from both public and private sources, and to alleviate
unnecessary regulatory burdens.'' \11\ Administrative priorities
include lowering the cost of housing and expanding housing supply.\12\
Administration policies also include, under Executive Order 14173,
protecting the civil rights of all Americans, terminating
discriminatory and illegal preferences, programs, and activities, and
combating illegal private-sector diversity, equity, and inclusion
preferences, policies, programs, and activities; \13\ and, under
Executive Order 14151 terminating to the maximum extent allowed by law,
all equity programs or action plans.\14\ Further, Administration policy
is to focus enforcement resources on regulations that are squarely
authorized by constitutional Federal statutes and to
[[Page 35477]]
reduce regulatory burden.\15\ FHFA believes that repeal of part 1293
will align with one or more of these policies.
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\10\ Executive Order 14219 (February 19, 2025), section 2, at 90
FR 10583 (February 25, 2025).
\11\ Executive Order 14192 (January 31, 2025), section 2, at 90
FR 9065 (February 6, 2025).
\12\ Presidential Memorandum of January 20, 2025, at 90 FR 8245
(January 28, 2025).
\13\ Executive Order 14173 (January 21, 2025), section 2, at 90
FR 8633 (January 31, 2025).
\14\ Executive Order 14151 (January 20, 2025), section 2(b)(i),
at 90 FR 8339 (January 29, 2025).
\15\ Executive Order 14219 (February 19, 2025), section 1, at 90
FR 10583 (February 25, 2025).
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C. Alleviating Unnecessary Regulatory Burdens
1. Compliance Requirements Under Sec. 1293.11(a) and (b) Are
Unnecessary, and Create Confusion With Agencies Having Primary
Jurisdiction
Section 1293.11(a) and (b), requires the regulated entities to
comply with statutes administered by other agencies. These are the Fair
Housing Act; ECOA; with respect to the Enterprises only, 12 U.S.C.
4545; \16\ and the FTC Act's prohibition against unfair, deceptive,
abusive acts and practices under 15 U.S.C. 45.\17\ However, these
regulatory requirements are unnecessary because, among other reasons,
the administering agencies for those statutes have promulgated
regulatory requirements.
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\16\ See 12 CFR 1293.2 (defines ``fair housing and fair lending
laws'' to be the Fair Housing Act, the Equal Credit Opportunity Act,
and, with respect to an Enterprise, 12 U.S.C. 4545).
\17\ See 12 CFR 1293.11(a) and (b) (compliance with fair housing
and fair lending laws and the FTC Act's prohibition against UDAP).
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With respect to the Fair Housing Act, the Department of Housing and
Urban Development (``HUD'') is the administering agency.\18\ Similarly,
with respect to the fair housing provisions of the Safety and Soundness
Act, HUD is the administering agency.\19\ With respect to ECOA, the
Consumer Financial Protection Bureau (``CFPB'') succeeded the Federal
Reserve Board as the agency responsible for issuing regulations.\20\
Finally, the FTC is the administering agency for the FTC Act including
for prescribing rules that define prohibited unfair or deceptive acts
or practices.\21\ It is, therefore, unnecessary and redundant for FHFA
to publish a regulation requiring compliance with those statutes.
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\18\ See 42 U.S.C. 3608(a) (``The authority and responsibility
for administering this Act shall be in the Secretary of Housing and
Urban Development'').
\19\ The Secretary of Housing and Urban Development administers
12 U.S.C. 4545. This authority resided with HUD when the Safety and
Soundness Act was first enacted in 1992. See Public Law 102-550,
title XIII, sec. 1325 (Oct. 28, 1992). In 2008, despite transferring
other responsibilities, such as for housing goals, to FHFA, Congress
retained fair housing and fair lending authority for the Secretary
of HUD. See Public Law 110-289, div. A, title I, sec. 1122(b) (July
30, 2008) (Retention of Fair Housing Responsibilities by HUD under
12 U.S.C. 4545). Under HUD's regulations, however, FHFA, as
successor to the Office of Federal Housing Enterprise Oversight
(OFHEO), exercises supervisory enforcement authority under the
Safety and Soundness Act over violations or potential violations of
12 U.S.C. 4545 referred by HUD. See 24 CFR 81.47; 59 FR 18266, 18273
(April 15, 1994) (Interagency Policy Statement on Fair Lending).
\20\ See 15 U.S.C. 1691b(a) (``The Bureau shall prescribe
regulations to carry out the purposes of this subchapter''). Prior
to the Dodd-Frank Act, the Federal Reserve Board had interpretive
and rulemaking authority over ECOA. See, e.g., 15 U.S.C. 1691b
(2009). Following the Dodd-Frank Act, interpretive and rulemaking
authority transferred to the CFPB. See Public Law 111-203, sec.
1085(1) (July 21, 2010) (amending ECOA to replace ``Board'' with
``Bureau''); 15 U.S.C. 1691b(a) (``The Bureau shall prescribe
regulations to carry out the purposes of this subchapter . . .'').
ECOA also authorizes CFPB to take regulatory action to create
classifications, adjustments, or exceptions for transactions
necessary to effectuate the purpose of ECOA. 15 U.S.C. 1691b(a).
\21\ See 15 U.S.C. 57a(a)(1)(A) (interpretive rules and general
statements of policy regarding UDAP) & (B) (rules which ``define
with specificity'' acts or practices which are unfair or deceptive).
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Repealing Sec. 1293.11(a) and (b) would not implicate any reliance
interest given that to the extent they are applicable, they simply
restate existing obligations. Paragraphs (a) and (b) do not provide any
specific benefits because, to the extent they are applicable, they are
redundant and may induce additional cost burden due to administrative
confusion. Duplicative overlap in regulation and statute throughout
agency functions is costly for the government and repeal would result
in savings.\22\
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\22\ See, e.g., U.S. Gov't Accountability Off., GAO-21-104648,
Addressing Fragmentation, Overlap, and Duplication: Progress in
Enhancing Government Effectiveness and Achieving Hundreds of
Billions of Dollars in Financial Benefits (2021) (GAO reported $515
billion in cost savings from congressional and executive agency
efforts to reduce, eliminate, or better manage fragmentation,
overlap, or duplication).
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2. Requirement Establishing a Specific Director Duty Under Sec.
1293.11(c) Is Unnecessary
Section 1293.11(c) establishes a duty for a regulated entity
director to direct the operations of the regulated entity in conformity
with the Fair Housing Act, the fair housing provisions of the Safety
and Soundness Act, ECOA and the UDAP prohibition under the FTC Act,
including by appropriately considering compliance with those specified
laws in the board's oversight of the regulated entity and its business
activities.
Notwithstanding FHFA's authority to establish or modify corporate
governance requirements applicable to the regulated entities, the
establishment of the specific director duty in Sec. 1293.11(c) is
unnecessary at this time because, among other reasons, under the Safety
and Soundness Act, FHFA exercises its general regulatory authority over
its regulated entities to ensure that the purposes of applicable law
are carried out.\23\
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\23\ It should be noted that FHFA similarly declined to
designate 12 CFR part 1293 as a Prudential Management and Operations
Standard, in response to commenter concerns that it would be an
inappropriate use of the PMOS authority and that existing
supervisory and enforcement authorities are sufficient. 89 FR at
42778.
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FHFA's exercise of general regulatory authority in this regard is
reflected, in part, in FHFA's corporate governance regulation which
requires a regulated entity to establish and maintain ``a compliance
program that is reasonably designed to assure that the regulated entity
complies with applicable laws, rules, regulations, and internal
controls'' and to file regulatory reports.\24\ FHFA examines the
regulated entities on whether they comply with laws, regulations, and
regulatory requirements that they operate under.\25\ FHFA requires each
board of directors to adopt and have in effect at all times a strategic
business plan.\26\ Existing corporate governance standards also require
a regulated entity's board of directors to direct the ``conduct and
affairs of the entity in furtherance of the safe and sound operations
of the entity and shall remain reasonably informed of the condition,
activities, and operations of the entity.'' \27\ Each regulated
entity's board of directors is responsible for approving and having in
effect at all times an enterprise-wide risk management program, which
includes ensuring management competency and processes to identify,
manage, monitor, and control risk exposures.\28\ FHFA also holds
accountable each regulated entity board of directors for periodically
reviewing the capabilities for, and adequacy of resources allocated to,
enterprise-wide risk management.\29\
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\24\ See 12 CFR 1239.12 (requires a program to assure compliance
with ``applicable laws, rules, and regulations'') and 1239.13
(regulatory reporting of information needed to evaluate safety and
soundness or compliance with law, order, rule, or regulation); 80 FR
at 72334 (compliance program needs to be reasonably designed to
assure compliance with applicable laws and regulations).
\25\ See 77 FR 67644, 67646-47 (November 13, 2012) (FHFA
Examination Rating System) (highest overall composite ratings, and
component ratings for management and operational risk, depend on
whether the regulated entity is in ``substantial compliance'' with
laws and regulations).
\26\ See 12 CFR 1239.14(a) (Adoption of strategic business
plan).
\27\ See 12 CFR 1239.4(a) (Duties and responsibilities of
directors).
\28\ See 12 CFR 1239.11(a) (Risk management program); see also
12 CFR part 1236, Appendix, Prudential Management and Operations
Standards (``PMOS''), Standard 8--Overall Risk Management Processes.
PMOS Standard 8 establishes the board of directors responsibility
for overseeing the regulated entity's overall risk management
processes, ensuring management competency and that processes are in
place to identify, manage, monitor, and control risk exposures.
\29\ See 12 CFR 1239.11(b)(2)(iii) (board risk committee
responsibilities).
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Moreover, under recent caselaw developments, corporate directors
and managers have a responsibility, under
[[Page 35478]]
their fiduciary duties, to oversee compliance with laws that apply to
their business, which could include applicable anti-discrimination
laws.\30\ The duty of a director requires a good faith effort to assure
that an adequate corporate information and reporting system exists that
provides timely and accurate information for the board and senior
management to make judgments about compliance and business performance;
such approach assures that board service by qualified persons is more
likely, thus benefitting corporate shareholders as a class.\31\
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\30\ See, e.g., In re McDonald's Corp. S'holder Derivative
Litig., 289 A.3d 343 (Del. Ch. 2023) (in derivative action against
corporate officers for breach of duty to oversee corporate
compliance with employment discrimination and sexual harassment
laws, court applied the standard of care in the Caremark Int'l case
requiring good faith in overseeing a corporate compliance reporting
system and held corporate officers to same fiduciary duty of
oversight as corporate directors for matters within the officers'
areas of responsibility); In re Caremark Int'l, 698 A.2d 959, 970
(Del. Ch. 1996) (a director's duty includes a duty, in good faith,
to assure that an adequate corporate information and reporting
system exists reasonably designed to provide senior management and
the board timely, accurate information sufficient to reach informed
judgments concerning both the corporation's compliance with law and
its business performance); Graham v. Allis-Chalmers Mfg. Co., 188
A.2d 125 (Del. 1963) (a director has a duty to take action to
address wrongdoing when they are aware of ``red flags'').
\31\ See, e.g., In re Caremark Int'l, 698 A.2d at 971 (``[A]
demanding test of liability in the oversight context is probably
beneficial to corporate shareholders as a class, as it is in the
board decision context, since it makes board service by qualified
persons more likely'').
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Thus, Sec. 1293.11(c) providing for a regulatory duty for
directors to direct their institution in conformity with certain
specified laws is not needed.\32\ Due to its redundancy, Sec.
1293.11(c) does not provide any specific benefits, and may induce
additional cost burden due to administrative confusion.\33\ Repealing
Sec. 1293.11(c) would not implicate any reliance interest because
paragraph (c) duplicates existing obligations in a manner that may
cause confusion.
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\32\ While corporate officers individually may not be found
vicariously liable for an employee's or agent's violation of the
Fair Housing Act, Meyer v. Holley, 537 U.S. 280 (2003), regulated
entity directors retain responsibilities established the authorizing
statutes, FHFA regulations, and the elected body of corporate
governance law. Regulated entity directors remain subject to FHFA
enforcement authority for unsafe or unsound practices, breach of
fiduciary duty, and violations of law.
\33\ The regulated entities also expressed concern that the
imposition of an additional director duty may not fully align with
the appropriate oversight duties of the Board and could interfere
with application of the business judgement rule. See Fannie Mae
comment letter from Stergios Theologides pg. 5-6 & Freddie Mac
comment letter from Danny Gardner, pg. 2.
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3. Section 1293.12(a) Duplicates Statutory Reporting Process, and Sec.
1293.12(b) Certification Requirement Is Unnecessary
Section 1293.12(a) provides for regulated entity reporting to FHFA.
This provision is unnecessary because FHFA is already authorized under
12 U.S.C. 4514 to require regulated entity submission of reports
without a separate and redundant regulatory provision, such as Sec.
1293.12(a). Having a separate regulatory provision that may have
different enforcement remedies from the Agency's existing statutory
reporting authority could lead to confusion regarding the basis for
information requests and potentially create unnecessary complexity in
the entities' reporting processes. Repealing Sec. 1293.12(a) and,
instead, relying on the existing statutory reporting authority promotes
clarity and efficiency.
Due to its redundancy, Sec. 1293.12(a) does not provide any
specific benefits, and may induce additional cost burden due to
administrative confusion. Because Sec. 1293.12(a) merely restates
FHFA's existing statutory reporting authority in a potentially
confusing manner, no reliance interests are affected by repeal of this
provision.
Section 1293.12(b) provides for regulated entity certification of
compliance with certain laws. It should be noted that, to the extent
laws are applicable to the activities of the regulated entities, the
regulated entities are required to comply. Section 1293.12(b) adds
redundant compliance burdens in the form of a certification and
supporting process. It may also lead to confusion over the appropriate
attention a board of directors should place on compliance with fair
housing and fair lending laws as compared to other laws in overseeing
regulated entity safety and soundness and enterprise risk management.
Repealing Sec. 1293.12(b) would thus reduce regulatory burden and
confusion in support of FHFA's goal to ensure board oversight of safety
and soundness and compliance.\34\
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\34\ Empirical studies show that economic growth is dampened by
administrative burden associated with regulations. See James
Broughel and Robert W. Hahn, The Impact of Economic Regulation on
Growth: Survey and Synthesis, 16 Reg. & Governance, 448-69 (2022);
Bentley Coffey et al., The Cumulative Cost of Regulations, Rev. of
Econ. Dynamics (2020); Jeremy Straughter & Kathleen Carley, Towards
a Network Theory of Regulatory Burden, 6 Applied Network Science
(2021). Regulatory burden can reduce incentives for businesses to
invest and innovate. See Alberto Alesina et al., Regulation and
Investment, 3 J. Eur. Econ. Ass'n, 791-825 (2005); Philippe Aghion,
Antonin Bergeaud, & John Van Reenen, The Impact of Regulation on
Innovation, 113 Am. Econ. Rev., 2894-2936 (2023).
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4. Subpart C (Sec. Sec. 1293.21 to 1293.27) Equitable Housing Finance
Planning Requirements Could Conflict With Policy
A. Summary of Subpart C Requirements
Part 1293, subpart C (``subpart C''), establishes a regulatory
requirement for the Enterprises to develop, execute, and report on an
Equitable Housing Finance Plan (``Plan''). First, subpart C requires
each Enterprise to adopt a Plan every three years that identifies
barriers to sustainable housing opportunities faced by one or more
underserved communities, goals and objectives with respect to the
identified barriers, and meaningful actions to support accomplishment
of the goals and objectives.\35\ Each Enterprise is required to submit
its Plan or annual update by September 30 of the year prior to the year
covered by the Plan.\36\ Under the subpart, FHFA must review the
submitted Plan or update for any content inconsistent with the Safety
and Soundness Act, the authorizing statute, or other applicable law,
and may remove such content prior to Enterprise publication.\37\ The
subpart requires each Enterprise to ensure that a Plan relies on
adequate information in identifying the underserved community for its
Plan, and provides that actions not compliant with the Safety and
Soundness Act, the authorizing statutes, or other applicable law do not
qualify as meaningful actions.\38\
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\35\ See 12 CFR 1293.22(a) & (b).
\36\ See 12 CFR 1293.22(c).
\37\ See 12 CFR 1293.22(f).
\38\ See 12 CFR 1293.25.
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Subpart C requires each Enterprise to annually report publicly on
its progress under its Plan, including a summary of outcomes for the
year (including outcomes for any activity, homeownership programs, or
products performed under the Plan) by race, ethnicity, and underserved
community group, and an assessment of the Enterprise's underwriting
outcomes and improvements.\39\ Each Enterprise must submit its report
to FHFA, prior review by February 15 and publish by April 15.\40\
Subpart C also requires a public engagement process (conducted by FHFA)
for each Enterprise to consider public input, including from
stakeholders such as housing market participants and members of
underserved communities, in developing and implementing its Plan.\41\
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\39\ See 12 CFR 1293.23(a) & (b).
\40\ See 12 CFR 1293.23(c)-(e).
\41\ See 12 CFR 1293.24.
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Subpart C requires the board of directors for each Enterprise to
[[Page 35479]]
appropriately consider the objectives, actions, and goals of the
Enterprise Plan, housing goals, Duty to Serve plans and targets, and
other mission-related obligations in the board's oversight of the
Enterprise.\42\
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\42\ See 12 CFR 1293.26.
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B. Notwithstanding FHFA Authority To Establish Corporate Governance
Requirements, Policy Supports Repeal of Subpart C
Similar to director duties for its regulated entities, FHFA has the
authority to establish or modify corporate governance requirements for
its regulated entities.\43\ These requirements may include, for
example, regulatory requirements related to a regulated entity
strategic business plan.\44\ Notwithstanding FHFA's authority to
establish or modify corporate governance requirements related to
planning, there has been a change in federal policy with respect to
activities that promote equity since FHFA published the final Fair
Lending, Fair Housing, Equitable Housing Finance Plans rule in 2024.
The final rule does not define ``equity,'' but other defined terms used
in the regulation which form the basis of the equitable housing
planning requirements were informed by the concept of equity as it was
interpreted in Executive Order 13985.\45\ Executive Order 13985,
however, was rescinded on January 20, 2025, when the President issued
Executive Order 14148.\46\
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\43\ See Discussion, above, in section V.C.2, concerning the
Specific Director Duty.
\44\ See 83 FR 52950 (October 19, 2018) (final rule amending 12
CFR part 1239 to add new 12 CFR 1239.14 requiring a board-approved
strategic business plan); 83 FR 14781, 14782 (April 6, 2018)
(proposed rule noting that the regulated entities were established
to fulfill public purposes and the strategic business plan would
support board oversight of regulated entity's successful
implementation of its strategic business plan and its public
purposes).
\45\ See 89 FR 42768, 42779, citing Executive Order 13985
(Advancing Racial Equity and Support for Underserved Communities
Through the Federal Government).
\46\ See Executive Order 14148 (January 20, 2025), at 90 FR 8237
(January 28, 2025).
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In addition, subpart C potentially conflicts with current policy by
establishing requirements that use the defined term ``underserved
community.''
Specifically, subpart C's requirement that the regulated entity
adopt a Plan that identifies an ``underserved community'' that is
experiencing barriers to sustainable housing, and that sets forth
``meaningful actions'' to reduce those barriers for the individuals
could raise issues with three Executive Orders. These are Executive
Order 14173 (Ending Illegal Discrimination and Restoring Merit-Based
Opportunity),\47\ and Executive Order 14151 (Ending Radical and
Wasteful Government DEI Programs and Preferencing).\48\
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\47\ 90 FR 8633 (January 31, 2025).
\48\ 90 FR 8339 (January 29, 2025).
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Executive Order 14173 covers ``major corporations, financial
institutions . . . [that] have adopted and actively use dangerous,
demeaning, and immoral race- and sex-based preferences under guise of
so-called `diversity, equity, and inclusion' (DEI) . . . that can
violate the civil-rights laws of this Nation.'' \49\ It establishes
current federal government policy as ``protecting the civil rights of
all Americans'' and, to further this policy, the Executive Order
requires all ``agencies to terminate all discriminatory and illegal
preferences, mandate, policies, programs, activities, guidance,
regulations, enforcement actions, consent orders, and requirements.''
\50\ The Executive Order further requires ``all agencies to enforce . .
. longstanding civil-rights laws and to combat illegal private-sector
DEI preferences, mandates, policies, programs, and activities.'' \51\
---------------------------------------------------------------------------
\49\ 90 FR at 8633 (Section 1).
\50\ 90 FR at 8633 (Section 2).
\51\ Id.
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Executive Order 14151 covers internal federal agency DEI programs,
policies, and budgets, which the Executive Order views as illegal
discrimination programs, and does not appear to cover Enterprise
activities under part 1293.\52\ Executive Order 14151 requires the
heads of the Office of Management and Budget (``OMB''), the U.S.
Department of Justice (``DOJ''), and the U.S. Office of Personnel
Management (``OPM'') to coordinate the termination of ``all
discriminatory programs, including illegal DEI . . . mandates,
policies, programs, preferences, and activities in the Federal
Government.'' \53\
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\52\ Executive Order 14151 states that to carry out this
directive, the heads of OPM and DOJ ``shall review and revise, as
appropriate, all existing Federal employment practices, union
contracts, and training policies or programs to comply with this
order.'' It also requires each agency to terminate ``all `equity
action plans,' `equity' actions, initiatives, or programs, `equity-
related' grants or contracts.''
\53\ 90 FR at 8339 (Section 2).
---------------------------------------------------------------------------
With respect to Executive Order 14173, to the extent that the Plan
required under Sec. 1293.22 provides for Enterprise actions to reduce
barriers to housing faced by individuals of a particular race and sex
without showing a need to remediate ``specific instances of past
discrimination that violated the Constitution or a statute'' and narrow
tailoring of the actions, such a Plan could conflict with Executive
Order 14173 against ``illegal'' DEI.\54\ Similarly, if the Enterprise
actions are viewed as based on the Enterprise independent judgment, and
the Plan fails to show that the actions do not unnecessarily trammel on
the rights of those not of that race or sex, such a Plan could also
conflict with the Executive Order's instruction against ``illegal''
DEI.\55\
---------------------------------------------------------------------------
\54\ See Students for Fair Admissions v. President and Fellows
of Harvard College, 600 U.S. 181, 207 (2023).
\55\ See, e.g., United Steelworkers of America, AFL-CIO-CLC v.
Weber, 443 U.S. 193 (1979) (Corporation's voluntary affirmative
action plan that granted preference to black employees over more
senior white employees for admission to in-plant craft training
programs did not violate Title VII. ``The legislative record [of
Title VII] shows that . . . Congress did not intend to limit
traditional business freedom to such a degree as to prohibit all
voluntary, race-conscious affirmative action'').
---------------------------------------------------------------------------
C. FHFA Is Committed To Promoting Affordable Housing Through
Statutorily Authorized Activities
In discussing the background for developing part 1293, FHFA
observed disparities in homeownership rates by race and ethnicity.\56\
FHFA also noted barriers to affordable housing in certain areas or by
certain demographic groups. For example, in rural areas, FHFA noted
that there was limited capital for affordable single- and multi-family-
housing, lower borrower credit scores, and higher mortgage denial
rates.\57\ In terms of the racial homeownership gap, FHFA noted that
African-American households are less likely to receive family
assistance with down payment or other forms of financial
assistance.\58\ FHFA also noted gaps in approval rates for automated
underwriting systems between demographic groups,\59\ home appraisal and
valuation disparities,\60\ as well as overall income and wealth
disparities among demographic groups.\61\ Subpart C codified a
conservator policy that the Enterprises develop and implement Equitable
Housing Finance Plans, with the aim of identifying and addressing
barriers to sustainable housing opportunities for underserved
communities.
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\56\ See 89 FR 42771-74.
\57\ Id. at 42772.
\58\ Id. at 42771.
\59\ Id. at 42772.
\60\ Id. at 42773.
\61\ Id. at 42771.
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As this section discusses, Congress provided express authorities
for FHFA, the FHLBanks, and the Enterprises to fulfill their public
purposes in promoting access to credit throughout the nation. These
authorities include housing goals to serve low-income and very low-
income families under 12 U.S.C. 4561 to 4564 for the Enterprises and 12
U.S.C. 1430c implemented at 12
[[Page 35480]]
CFR 1281.11 for the Banks, Enterprise requirements to support FHFA's
duty to serve underserved markets under 12 U.S.C. 4565, and
establishment and support of the Housing Trust Fund and Capital Magnet
Fund under 12 U.S.C. 4568 to 4569.
The Safety and Soundness Act requires FHFA to establish annual
housing goals for single-family and multifamily mortgages purchased by
the Enterprises.\62\ The annual housing goals are one measure of the
extent to which the Enterprises are meeting their public purposes,
which include ``an affirmative obligation to facilitate the financing
of affordable housing for low- and moderate-income families in a manner
consistent with their overall public purposes, while maintaining a
strong financial condition and a reasonable economic return,'' \63\
through statutorily authorized activities. The housing goals help
ensure the Enterprises fulfill their public purposes by promoting
access to affordable housing opportunities for low-income families,
families living in low-income areas, and very low-income families.\64\
---------------------------------------------------------------------------
\62\ 12 U.S.C. 4561(a).
\63\ 12 U.S.C. 4501(7).
\64\ 12 U.S.C. 4562 (single-family housing goals) & 4563
(multifamily housing goals).
---------------------------------------------------------------------------
In 2024, the Enterprises supported the financing of over 781,000
home purchase loans to first-time homebuyers, including about 390,000
home purchase loans to low-income borrowers (earning at or below 80
percent of area median income).\65\ Of these borrowers, nearly 88,000
were very low-income (earning at or below 50 percent of the area median
income).\66\ The Enterprises also supported the financing of over
573,000 housing goal-eligible units affordable to low-income renters,
almost 129,000 units affordable to very low-income renters, and almost
27,000 units in small multifamily properties (5-50 units) affordable to
low-income renters.\67\ FHFA intends to continue to ensure that the
Enterprises serve the needs of low-income and very low-income families.
---------------------------------------------------------------------------
\65\ See Enterprise 2024 Annual Housing Activity Reports &
Annual Mortgage Reports, available at <a href="https://www.fanniemae.com/about-us/corporate-governance/ahar-and-amr">https://www.fanniemae.com/about-us/corporate-governance/ahar-and-amr</a> and <a href="https://www.freddiemac.com/about/business/affordable-housing">https://www.freddiemac.com/about/business/affordable-housing</a>.
\66\ Id.
\67\ Id.
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The Safety and Soundness Act also requires the Enterprises to
develop loan products and flexible underwriting guidelines to
facilitate a secondary market for mortgages for very low-, low-, and
moderate-income families in three underserved markets: manufactured
housing, affordable housing preservation, and rural housing, in order
to increase liquidity and improve the distribution of investment
capital in these markets.\68\ To support the Enterprise duty to serve
underserved markets, each Enterprise is required to submit an
Underserved Markets Plan describing the activities and objectives that
it will undertake to maintain or increase liquidity to an underserved
market.\69\
---------------------------------------------------------------------------
\68\ 12 U.S.C. 4565 (duty to serve underserved markets).
\69\ 12 CFR 1282.32 (underserved markets plan).
---------------------------------------------------------------------------
In 2024, in the manufactured housing market, both Enterprises
exceeded their objectives for purchasing blanket loans for Manufactured
Housing Communities (MHCs) with certain pad lease protections specified
in the DTS regulation, resulting in a combined purchase of over 36,000
eligible units.\70\ For the affordable housing preservation market, the
Enterprises serve as an important source of capital for other federal,
state, and locally supported programs and projects, including HUD's
Section 8 Program. The Enterprises also provided liquidity for the
rural housing market, purchasing over 17,000 loans supporting housing
in high-needs rural regions.\71\
---------------------------------------------------------------------------
\70\ See Enterprise 2024 Annual Housing Activity Reports &
Annual Mortgage Reports, available at <a href="https://www.fanniemae.com/about-us/corporate-governance/ahar-and-amr">https://www.fanniemae.com/about-us/corporate-governance/ahar-and-amr</a> and <a href="https://www.freddiemac.com/about/business/affordable-housing">https://www.freddiemac.com/about/business/affordable-housing</a>.
\71\ Id.
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FHFA is authorized to recommend establishment of additional
underserved markets to the Committee on Financial Services of the House
of Representatives and the Committee on Banking, Housing, and Urban
Affairs of the Senate.\72\ Although FHFA has not yet exercised this
authority, FHFA retains the authority to identify new categories for
Congressional action and believes that this is available for ensuring
that the Enterprises meet their public purposes.
---------------------------------------------------------------------------
\72\ See 12 U.S.C.4565(c).
---------------------------------------------------------------------------
Additionally, the Safety and Soundness Act also requires the
Enterprises to set aside in each fiscal year an amount equal to 4.2
basis points (0.042 percent) for every dollar of unpaid principal
balance on total new business purchases in the prior year. In 2024, the
Enterprises set aside $301 million,\73\ and in February 2025 they set
aside $333 million.\74\ Of the amount set aside, the Enterprises must
transfer 65 percent to the Housing Trust Fund, which is administered by
HUD. They must transfer 35 percent to the Capital Magnet Fund, which is
administered by the U.S. Department of the Treasury.\75\ The Housing
Trust Fund allocates funding annually to states and state-designated
entities to produce or preserve affordable housing through the
acquisition, new construction, reconstruction, and/or rehabilitation of
non-luxury housing.\76\ The Capital Magnet Fund competitively awards
funds to finance affordable housing activities, related economic
development activities, and community service facilities.\77\
---------------------------------------------------------------------------
\73\ See 2024 Annual Housing Report, Table 12 available at:
<a href="https://www.fhfa.gov/document/annual-housing-report-2024">https://www.fhfa.gov/document/annual-housing-report-2024</a>.
\74\ See Freddie Mac, Annual Report (Form 10-K) 102 (Feb. 13
2025), <a href="https://www.freddiemac.com/investors/financials/pdf/10k_021325.pdf">https://www.freddiemac.com/investors/financials/pdf/10k_021325.pdf</a>; Fannie Mae, Annual Report (Form 10-K) 67 (Feb. 14,
2025), <a href="https://www.fanniemae.com/media/54826/display">https://www.fanniemae.com/media/54826/display</a>.
\75\ See 12 U.S.C. 4567(a).
\76\ See 12 U.S.C. 4568.
\77\ See 12 U.S.C. 4568 & 4569.
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Upon review, FHFA believes that the regulated entities' public
purposes can be accomplished more effectively through the exercise of
existing statutory authorities.\78\ The Enterprises remain subject to
longstanding statutory obligations to support access to credit in
underserved markets, primarily through the Affordable Housing Goals,
their duty to serve underserved markets, and affordable housing
allocation requirements. In this context, subpart C is unnecessary and
may divert Enterprise and Agency resources from approaches that are
aligned with FHFA's statutory mandates.
---------------------------------------------------------------------------
\78\ Members of Congress, the Regulated Entities, and industry
groups also agreed with this approach during rulemaking for subpart
C.
---------------------------------------------------------------------------
D. Repeal Would Reduce Regulatory Burden and Programmatic Cost
The repeal of subpart C is likely to result in significant
decreases in compliance and programmatic costs for the Enterprises.
Assuming that subpart C continues in effect, economic activity flowing
from the regulation can be estimated, in part, by evaluating Enterprise
investments made under their Plans. The Enterprises have completed
performance on their 2022-2024 Plans. A significant element of the
2022-2024 Enterprise Plans was their acquisition of loans made under
special purpose credit programs (``SPCP'') and subsidies paid to
borrowers via credits to lenders. These subsidies provide monetary
assistance to borrowers such as downpayment or closing cost assistance.
As part of the development of the final rule in 2024, FHFA
performed an economic analysis for the 2022-2024 Enterprise Plans.
FHFA's 2024
[[Page 35481]]
economic analysis concluded that the annual economic effect of part
1293 exceeded $100 million. The analysis was based on: (1) preliminary
data on actual Enterprise acquisitions of SPCP loans, which at that
time, totaled 565 loans for both Enterprises; (2) the total number of
SPCP loans that the Enterprises planned to purchase in the remaining
time under their Equitable Housing Finance Plans (``Plans'') for 2022-
24, which was 9,000 loans for both Enterprises at an average UPB of
$300,000 per loan; and (3) monetary subsidies to borrowers via credits
to lenders described in their 2022-2024 Plans related to SPCP loans
acquired. Based on the information available at the time, FHFA
determined that the annual economic effect of the 2022-2024 Plans from
the SPCP loan acquisitions was $2.73 billion, exceeding the threshold
of $100 million annually to be a major rule.
Since publication of the final rule, FHFA obtained updated
information on actual Enterprise purchases of SPCP loans and borrower
subsidies for 2022-2024. The Enterprises purchased approximately 57,282
SPCP loans, and paid approximately $81.9 million in subsidies via
lender credits to assist borrowers with loan pricing, closing costs, or
downpayment under their 2022-2024 Plans.\79\ For the period 2022-2024,
the economic activity produced by part 1293 is revised from $2.73
billion to $17.2 billion, including $81.9 million in subsidies paid to
borrowers via lender credits. This economic activity is now historical,
and will not change even if part 1293 is modified or repealed.
---------------------------------------------------------------------------
\79\ Freddie Mac & Fannie Mae 2022 & 2023 Performance Reports,
Equitable Housing Finance Plan. Freddie Mac & Fannie Mae Quarterly
Reporting for 2024.
---------------------------------------------------------------------------
On March 25, 2025, FHFA, as conservator, directed the Enterprises
to terminate future support of such loan acquisition.\80\
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\80\ William Pulte (@pulte), X (Mar. 25 2025), <a href="https://x.com/pulte/status/1904621959213965690">https://x.com/pulte/status/1904621959213965690</a>.
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Further, as a result of the repeal of part 1293, the Enterprises
will no longer be required to engage in developing, executing and
reporting on the Equitable Housing Finance Plans, and thus will benefit
from reduced administrative cost, including personnel and outreach.
FHFA intends to continue to exercise its general regulatory
authority to ensure that the purposes of the Safety and Soundness Act,
including housing goals, are carried out. FHFA will continue to
publicly report through its annual Report to Congress, Annual Housing
Report, and other performance and accountability documents, ensuring
transparency and continued focus on the Enterprises' missions within
their statutory mandate. To the extent the regulated entities continue
to meet their public purposes in other ways, some of the forgone
benefits under the baseline scenario may be offset in the repeal
scenario through benefits from their continued efforts to meet their
public purposes of providing mortgage liquidity throughout the Nation.
The final rule became effective in July 2024 and does not require
or commit the Enterprises to specific engagement or activities with any
specified stakeholders. Repeal would likely have minimal impact on any
reliance interests.\81\
---------------------------------------------------------------------------
\81\ 12 CFR 1293.1(c) (Part 1293 does not create a private right
of action).
---------------------------------------------------------------------------
5. Adequate Alternatives Exist To Render the Enterprise Data Collection
and Reporting Requirements Under Sec. 1293.41 Unnecessary
Section 1293.41 requires each Enterprise to collect, maintain, and
provide to FHFA single-family mortgage data on borrower and applicant
language preference and homeownership education. Section 1293.41 does
not require consumers to respond to the language preference and
homeownership education questions, but, if the consumer choses to,
requires that the Enterprises collect and maintain the information.
The Enterprises and industry stakeholders through MISMO, the
mortgage industry's standards development body, are already engaged in
collecting and using mortgage-related data as part of their standard
business practices and risk management.\82\ These organizations,
through collaborative efforts involving a wide range of industry
stakeholders--including lenders, servicers, technology providers, and
consumer advocates--develop and maintain comprehensive sets of data
elements that address industry needs. This organic, industry-driven
process ensures that data standards remain relevant, adaptable, and
responsive to emerging trends and requirements. The current standards
encompass a large body of data elements, reflecting the complexity and
multifaceted nature of mortgage origination and servicing.
---------------------------------------------------------------------------
\82\ See ``Mortgage Industry Standards Maintenance: Standards &
Resources Page'' available at, <a href="https://www.mismo.org/standards-resources">https://www.mismo.org/standards-resources</a>.
---------------------------------------------------------------------------
FHFA's role in this ecosystem is to foster a safe, sound, and
liquid housing finance system. While FHFA has the authority to mandate
data collection, unilaterally requiring the Enterprises to collect
specific data elements, such as borrower and applicant language
preference and homeownership education, risks inappropriately elevating
these elements over others that may be equally or more critical to
industry operations, risk management, or consumer protection. Such a
prescriptive approach could inadvertently disrupt the established,
consensus-based process of data standardization. Instead, FHFA believes
that the prioritization and integration of new data elements are best
determined through the ongoing efforts of industry stakeholders.
FHFA has access to language preference and homeownership counseling
and education data through the National Survey of Mortgage Originations
(NSMO). NSMO is a quarterly survey jointly funded and managed by FHFA
and CFPB that provides unique and rich information for a nationally
representative sample of newly originated mortgages to provide valuable
data to help inform policy and research.
Therefore, Sec. 1293.41 creates unnecessary redundancy, compliance
burden, and potential administrative confusion without significant
added value or benefit. Because Sec. 1293.41 unnecessarily duplicates
pre-existing MISMO standards, no reliance interests are implicated by
repeal. Mandating a separate, specific collection under Sec. 1293.41
adds an unnecessary layer of compliance obligation for which there are
adequate alternatives.
6. Equitable Housing Finance Requirements (FHLBanks), Sec. Sec.
1293.31 and 1293.32
Section 1293.31 requires each Bank to report on actions it
voluntarily took to support underserved communities, which report is
accompanied by a declaration by a designated officer pursuant to 12
U.S.C. 4514(a)(4) that the report is true and correct to the officer's
knowledge and belief.
Section 1293.32 requires each Bank to report publicly on any
voluntary actions taken to overcome housing barriers faced by any
underserved community and planned actions. Alternatively, it requires
each Bank to provide notice that it has not and does not plan to take
any voluntary actions to overcome housing barriers by any underserved
community.
The Agency believes that, at this time, the FHLBanks' statutorily
required Affordable Housing Programs and Community Investment Programs
provide adequate means for the FHLBanks to carry out their statutory
purposes. Many of the Equitable
[[Page 35482]]
Housing Finance Program requirements could be met through the FHLBanks'
Affordable Housing Programs (``AHPs'') and Community Investment
Programs. For example, the AHPs require the FHLBanks to identify and
address district affordable housing and credit needs in their Targeted
Community Lending Plans, in coordination with their Affordable Housing
Advisory Council, members, and other key stakeholders. Requiring a
separate reporting mechanism is therefore unnecessary for activities
proceeding under these existing program frameworks.
In addition, reporting under Sec. Sec. 1293.31 and 1293.32 imposes
an administrative burden on the FHLBanks, diverting resources from
potentially more impactful activities. Such burden includes costs
associated with defining ``voluntary actions,'' collecting data,
preparing narratives, and securing officer declarations. Similarly,
FHFA expends resources in reviewing these voluntary reports, which, due
to their inconsistent nature, may offer limited actionable insights.
These resources could be more efficiently allocated to other
supervisory functions.
Repealing Sec. Sec. 1293.31 and 1293.32 is further supported by
the fact that these sections are not yet effective. As a result, FHFA
believes there is little reliance interest in maintaining the
requirements, including efforts in establishing processes, allocating
resources, or developing reporting mechanisms to comply. Repealing at
this stage avoids disrupting any existing compliance frameworks or
requiring the undoing of established practices.
7. Subpart A's Housekeeping Provisions Would Be Unnecessary if the
Operative Portions of the Regulation Were Repealed
Finally, part 1293, subpart A contains supporting provisions to
administer part 1293. These include, under Sec. 1293.1, a summary
description of the regulation, an express provision that the regulation
does not permit a regulated entity to engage in any activity
inconsistent with applicable law, an express clarification that the
regulation does not create third party rights, and a severability
provision. Subpart A also includes, under Sec. 1293.2, a definitions
section. It also includes, under Sec. 1293.3 a provision providing for
examination and enforcement of the regulation. Lastly, Sec. 1293.4
contains a provision to clarify that the regulation does not limit the
agency from acting under its other authorities. These administrative
provisions could be repealed as unnecessary if FHFA repeals the
operative provisions of part 1293 discussed above.
VI. Reservation of Authority
Notwithstanding any repeal of part 1293, FHFA retains all
authority, and continues to exercise general regulatory, examination,
and enforcement authorities over its regulated entities to ensure that
they are operated and managed in a safe and sound manner, comply with
applicable law, and fulfill their public purposes. FHFA exercise of
these authorities may be reflected in its supervision and enforcement
program and activities, including appropriate rulemaking, examination,
and enforcement to address safety and soundness and compliance with
applicable law. FHFA exercise of these authorities may also be
reflected in coordination and cooperation with other federal agencies
generally or on specific matters to ensure that the purposes of the
Safety and Soundness Act, the authorizing statutes, and any other
applicable law are carried out. The repeal of unnecessary FHFA
requirements for the regulated entities to comply with specified laws
administered by other agencies is not intended to affect the
applicability, effectiveness, or enforcement of those laws with respect
to the regulated entities.
VII. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires that
a regulation that has a significant economic impact on a substantial
number of small entities, small businesses, or small organizations must
include an initial regulatory flexibility analysis describing the
regulation's impact on small entities. FHFA need not undertake such an
analysis if the agency has certified that the regulation will not have
a significant economic impact on a substantial number of small
entities. 5 U.S.C. 605(b). FHFA has considered the impact of the
proposed rulemaking under the Regulatory Flexibility Act and FHFA
certifies that the proposed rule, if adopted as a final rule, will not
have a significant economic impact on a substantial number of small
entities because the regulation only applies to Fannie Mae, Freddie
Mac, and the FHLBanks, which are not small entities for purposes of the
Regulatory Flexibility Act.
VIII. Paperwork Reduction Act
The proposed rule to repeal part 1293 would not contain any
information collection requirement that would require the approval of
OMB under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).
Therefore, OMB review for the Paperwork Reduction Act is not required.
IX. Regulatory Planning and Review Under Executive Orders 12866 and
14215
Executive Order 14215 \83\ (Independent Agency Accountability)
amends Executive Order 12866 \84\ (Regulatory Planning and Review) to
include in its definition of ``agency,'' those agencies under 44 U.S.C.
3502(1) including any ``independent regulatory agency.'' Accordingly,
pursuant to Executive Order 12866 as amended, FHFA must determine
whether its regulatory action proposing repeal is ``significant'' and
subject to review by OMB. Executive Order 12866 defines a ``significant
regulatory action'' as one that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or tribal governments or
communities; (2) create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency; (3) materially alter
the budgetary impact of entitlements, grants, user fees, or loan
programs or the rights and obligations of recipients thereof; or (4)
raise novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive
Order.
---------------------------------------------------------------------------
\83\ 90 FR 10447 (February 24, 2025).
\84\ 58 FR 51735 (October 4, 1993).
---------------------------------------------------------------------------
FHFA has determined the proposed rule not to be a significant
regulatory action for purposes of E.O. 12866. OMB has reviewed FHFA's
economic impact analysis and has concurred in the determination that
this proposed rule to repeal part 1293 is not a significant regulatory
action and does not require OMB coordination and review under E.O.
12866. Further, as a deregulatory action, FHFA does not expect the
proposed action to interfere with the actions of another agency,
materially alter the budgetary impact of programs, nor raise novel
issues relating to legal mandates or the President's priorities.
X. Providing Accountability Through Transparency Act of 2023
The Providing Accountability Through Transparency Act of 2023 (5
U.S.C. 553(b)(4)) requires that a notice of proposed rulemaking include
the internet address of a summary of not more than 100 words in length
of a
[[Page 35483]]
proposed rule, in plain language, that shall be posted on the internet
website under section 206(d) of the EGovernment Act of 2002 (44 U.S.C.
3501 note) (commonly known as <a href="http://regulations.gov">regulations.gov</a>). FHFA's summary of its
notice of proposed rulemaking for repeal of part 1293 can be found at
<a href="https://www.regulations.gov">https://www.regulations.gov</a>.
List of Subjects in 12 CFR Part 1293
Fair housing, Federal home loan banks, Government-sponsored
enterprises, Mortgages, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, under the authority of 12
U.S.C. 4511, 4513, 4513b, and 4526, FHFA proposes to remove and reserve
12 CFR part 1293.
PART 1293--[REMOVED AND RESERVED]
0
1. Remove and reserve part 1293, consisting of Sec. Sec. 1293.1
through 1293.41.
Clinton Jones,
General Counsel, Federal Housing Finance Agency.
[FR Doc. 2025-14183 Filed 7-25-25; 8:45 am]
BILLING CODE 8070-01-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.