An Agency Is Born, Agenda at the Ready

American Banker (07/31/08) P. 1; Blackwell, Rob; Kaper, Stacy
The housing bill signed into law by President Bush on July 30 immediately created the Federal Housing Finance Agency to oversee Fannie Mae, Freddie Mac and the Federal Home Loan Banks. While the Office of Federal Housing Enterprise Oversight (OFHEO) and the Federal Housing Finance Board will remain in existence for another year, most of their duties and employees will be transferred to the new watchdog. The new agency, headed by OFHEO director James Lockhart, must merge the two former regulators; assume oversight of all the government-sponsored enterprises (GSEs); and create new standards for internal controls, internal audit systems, interest rate risk management, market risk management and liquidity adequacy, among other things. Additionally, it must create new capital requirements for all the GSEs and write new rules for Fannie Mae and Freddie Mac's portfolios, balancing safety and soundness with the GSEs' mission.