What fate awaits Fannie, Freddie, and the CFPB under Trump?

First week in office has shed few clues on what the new administration has in store for the GSEs and consumer watchdog

What fate awaits Fannie, Freddie, and the CFPB under Trump?

Just over a week after taking office, Donald Trump’s flurry of executive orders shows little sign of slowing – but mortgage market watchers are still on tenterhooks to find out what’s in store for Fannie Mae, Freddie Mac, and the Consumer Financial Protection Bureau (CFPB) under the new president.

Trump’s first administration took steps toward ending the conservatorship of the government-sponsored enterprises (GSEs), which have been under majority government control since the mortgage meltdown of 2008, and new Federal Housing Finance Agency (FHFA) head Bill Pulte is expected to be tasked with advancing those moves again in the years ahead.

The CFPB, meanwhile, has found a prominent opponent in Elon Musk, head of the department tasked with slashing government costs, who’s called for the consumer agency to be “deleted”.

But there’s been precious little mention of Fannie or Freddie during Trump’s first days back in office – and while new executive orders have mandated freezes on hiring and new regulations at most government agencies, that doesn’t include the CFPB (an independent agency).

Trump’s nominee for Treasury secretary, Scott Bessent, said “no conservatorship should be indefinite” when asked last week about the prospect of removing Fannie and Freddie from government control, but didn’t give details of concrete steps intended to push that forward.

Nor has Pulte staked out a public position on that issue. “How that turns out at this point is not clear,” mortgage lawyer Peter Idziak (pictured top), of Polunsky Beitel Green, told Mortgage Professional America. “Whether it’s really something that becomes a high priority for the administration is also not clear.”

He suggested the Fannie-Freddie issue could take a backseat to more immediate concerns on the housing and mortgage fronts for the government, as dismantling conservatorship is likely to be a longer-term project.

It could also be hamstrung by the fact that no consensus has emerged on what the GSEs would look like outside conservatorship, with organizations including the Mortgage Bankers Association (MBA) pushing for an explicit guarantee of Fannie-Freddie mortgage-backed securities, while others have called for an end to any full or implicit guarantee.

“Even though both sides agree that the conservatorship shouldn’t continue on, they’re diametrically opposed to what it looks like coming out,” Idziak said.

CFPB remains under Chopra leadership – for now

Rohit Chopra, meanwhile, remains in place as director of the CFPB despite widespread expectations that he would be removed immediately – and that could impact what’s in store for the agency in the year ahead, according to Idziak. “There is no nominee waiting in the wings,” he said. “And the CFPB has a lot of regulatory authority over consumer finance in the mortgage lending space.

“It’s a very odd situation… Chopra said if he’s asked to resign, he’ll resign but otherwise he’s going to serve out his term. So you have this Biden administration holdover now subject to a Trump executive order to reduce regulatory requirements – how is that actually going to work? I don’t think Chopra sticks around very much longer, but it is interesting that he’s still there.”

Could the CFPB be cut entirely under Trump and Musk?

As for the chances of taking an ax to the agency or dismembering it entirely? That’s a remote prospect, Idziak said, with broad support across the political spectrum in Washington for the body meaning it’s likely to remain intact.

“I really don’t think there’s any prospect of deleting the CFPB,” he said. “I think that there’s much more of an appetite for reform, for making it more of a commission structure where you don’t have a single director – and then maybe you bring the appropriations process back into it because right now, it’s sort of outside that normal government appropriations process and is funded through income from the Fed.

“So I think that’s where this ends up. I don’t think you’re going to see it deleted because there is public support on both sides of the aisle for some of the work that it does.”

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