The American Banker reported that FHFA Director Calabria has reiterated the concept of using a consent agreement to ease the GSEs’ path from conservatorship without full recapitalization.  Senate Banking Democrats have already targeted this option as a potential problem as they look for ways to block privatization.  It would not, however, lead to release and recap – rather, it’s a possible step along the way to recap and then to release backed by a far more substantial amount of capital than contemplated in ongoing private shareholder litigation.  Recap and release with a consent agreement ensures that liberated GSEs are not freewheeling GSEs, but it’s also a complex construct with numerous challenges.

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