The Federal Housing Finance Agency (FHFA) is proposing a rule requiring Fannie Mae and Freddie Mac to create resolution plans to ensure their smooth operation in case FHFA is appointed as a receiver. This rule is part of developing a strong regulatory framework for these enterprises as they prepare to exit conservatorship. The intended resolution planning aims to minimize market disruptions, ensure fair loss distribution among investors, and enhance market discipline. The FHFA invites public comments on this rule by March 9, 2021.
Simple Explanation
Fannie Mae and Freddie Mac need to make plans for when things go wrong, like a backup plan if they're in big trouble, to help keep everything running smoothly and make sure everyone is treated fairly. The people in charge want to hear what others think about this idea by March 9, 2021.