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Treasury and the Federal Housing Finance Agency (FHFA) announced a deal Thursday to allow government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac to reinstate $3 billion in their capital reserves, action supported by NAFCU.

NAFCU wrote to FHFA Director Mel Watt in October urging the agency to ensure the GSEs' ability to maintain capital in order to provide stability in the event of short-term losses.

"While it is apparent that a draw will be necessary for each Enterprise if tax legislation results in a reduction to the corporate tax rate, FHFA considers the $3 billion capital reserve sufficient to cover other fluctuations in income in the normal course of each Enterprise's business," Watt said. "We, therefore, contemplate that going forward Enterprise dividends will be declared and paid beyond the $3 billion capital reserve in the absence of exigent circumstances."

The GSEs were placed into conservatorship following the 2008 financial crisis. As part of an agreement between the Treasury Department and the FHFA, the GSEs are required to send all of their income to the Treasury, but this obligation was going to leave the GSEs with no money in their reserves at the start of 2018.

Treasury Secretary Steven Mnuchin in September had commented that his department "expect[s] our dividends to be paid," which indicated the GSEs' capital sweep would continue and they would not begin rebuilding their capital buffers. Taxpayers are set to receive $7.7 billion from the GSEs at the end of December.

NAFCU holds that the GSEs should be allowed to rebuild their capital buffers to ensure their safety and soundness. NAFCU has resources on housing finance reform, including principles for housing finance reform to protect the credit union industry.