As noted in our three summaries of key FHFA comment letters, FHFA was not exactly overwhelmed by heartfelt praise for its GSE capital rule. However, stripped of the asks FHFA cannot or will not grant — i.e., an explicit guarantee, a total rewrite treating the GSEs as insurers – we see numerous areas in which at least some commenters will have their way. Those who don’t may temper their fury by recalling that, if FHFA is forced to back down on what it and perhaps even more importantly the Fed considers key points, then systemic designation may well await Fannie and Freddie and the capital rules the Fed favors will be still more bank-like and less amenable to change.

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