Industry trade groups as well as analysts believe the proposed waiver pilot is purely a political gesture and will, in fact, expose borrowers and lenders to financial risk.
The FHLBanks, like Fannie Mae and Freddie Mac, have a public/private structure that can incentivize private profits at public cost. Don Layton, former Freddie CEO, said the banks are ripe for reform.
The approaching expiration of Treasury’s warrants on Fannie and Freddie stock and the possibility of a second Trump administration have revived debate on the potential end of the conservatorship of the GSEs.