WASHINGTON—A plan to impose stricter capital requirements on mortgage giants Fannie Mae and Freddie Mac on Friday won the endorsement of a group of regulators that monitors risks to the financial system.
The Financial Stability Oversight Council, which is chaired by Treasury Secretary Steven Mnuchin, voted unanimously to endorse the plan, saying in a four-page statement that it represents a “significant step” to ensure the companies can operate soundly “during and after a period of severe stress.”
Fannie’s and Freddie’s independent regulator, the Federal Housing Finance Agency, is working on a rule that will determine how much capital the mortgage firms must raise once they exit from more than a decade under government control.
Fannie and Freddie guarantee about half the $10 trillion U.S. mortgage market, and returning them to private hands is a top goal of the Trump administration and the FHFA. The agency sees the capital plan as a key step on that path.