On October 7, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of Thrift Supervision (each, an Agency, and collectively, the Banking Agencies) issued a notice of proposed rulemaking with respect to the risk weight for claims on, and the portion of claims guaranteed by, the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac). The proposed 10 percent risk weight to be set forth in each Agency’s risk-based capital rules would apply so long as an agreement remains in effect between the U.S. Treasury and Fannie Mae or Freddie Mac. The current risk weight for such claims is 20 percent.
The Banking Agencies believe reducing the risk weight from the current level to the 10 percent risk weight is appropriate in light of the financial support the U.S. Treasury provided to Fannie Mae and Freddie Mac in September through their senior preferred stock purchase agreements. In addition, the proposed rule is elective and “would apply only to banking organizations that choose to take advantage of the proposed 10 percent risk weight.”
This proposal would not affect the calculation of the leverage ratio with respect to these exposures.
Comments are due 30 days after publication in the Federal Register.