Washington, D.C. – Armando Falcon, Jr., Director of the Office of Federal Housing Enterprise Oversight (OFHEO), safety and soundness regulator of Fannie Mae and Freddie Mac (the Enterprises), announced that the Office of Management and Budget (OMB) has completed its review of OFHEO's risk-based capital rule. The rule will be sent to the Federal Register for printing as a final rule and made available to the public on Thursday, July 19, 2001.
"I appreciate the very thoughtful and diligent review undertaken by OMB. OFHEO will now have in place the final component of our effective and efficient regulatory program," said Director Falcon. "This rule will be an important complement to our examination, research and general supervisory activities."
"This risk-based capital standard will ensure the Enterprises can withstand highly stressful economic conditions while still fulfilling their public mission. In addition, it will more closely tie capital to risk than any existing capital standard while allowing the Enterprises appropriate flexibility to manage their businesses," said Director Falcon. "I am confident that the Enterprises will be able to comply with this standard without any adverse impact on their operations."
"The computer model which implements the rule has undergone rigorous testing and verification by the independent accounting firm of Deloitte and Touche. While not required by law but consistent with industry modeling practice, OFHEO took this extra step to ensure the model produces accurate and reliable results."
"I want to commend the very talented and dedicated staff of OFHEO who worked tirelessly to bring this rule to a conclusion. They completed an unprecedented task under very difficult circumstances. I also appreciate the support of Congress and HUD throughout this process."
Stefanie Johnson (202) 649-3030