Suspended Counterparty Program
Key claim: FHFA proposes to remove ‘reputational harm’ from its Suspended Counterparty Program regulation to eliminate redundancy and ground counterparty risk supervision in material and measurable risks.
Abstract
(Proposed Rule · Federal Housing Finance Agency) The Federal Housing Finance Agency (FHFA) is proposing to amend its Suspended Counterparty Program (SCP) regulation by removing the term “reputational harm.” This amendment would eliminate redundancy and affirm that FHFA’s supervision of counterparty risk is based on material and measurable risks.
Why this matters
The Suspended Counterparty Program is one of FHFA’s primary tools for policing who can do business with the housing finance Enterprises, so tightening the standard from ‘reputational harm’ to material, measurable risk narrows the universe of conduct that can bar lenders, servicers, and vendors from the secondary mortgage market. For builders and lenders, this could reduce ambiguity about disqualifying conduct; for renters and buyers, the change is upstream but shapes which counterparties remain in the Enterprise ecosystem.