WASHINGTON–An announcement from the FHFA that Fannie Mae and Freddie Mac will now consider unconverted cryptocurrency assets when considering mortgages for borrowers of single-family properties has a number of Democratic senators raising concerns.
As the CU Daily reported here, FHFA Director Bill Pulte said in a statement on X, “We will study the usage [of] cryptocurrency holdings as it relates to qualifying for mortgages.”
But the Democratic lawmakers say they are worries about volatility risks, regulatory blind spots, and governance conflicts. The senators, Jeffrey Merkley (D-OR), Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), Mazie Hirono (D-HI), and Bernie Sanders (D-VT) sent a letter to Pulte requesting additional details about his directive to Fannie Mae and Freddie Mac.
The Requests
The letter requests the FHFA:
- Disclose its full risk analysis
- The timeline and process for board approvals
- The criteria for evaluating eligible cryptocurrencies.
- Provide a comprehensive list of internal and external meetings held on the topic, including the identities of consulted federal regulators or nongovernmental stakeholders
- Information on the measures in place to detect and prevent conflicts of interest.
The Warning
The letter, which cited prior oversight gaps, warns that:
- Expanding underwriting criteria to include the consideration of unconverted cryptocurrency assets could pose risks to the stability of the housing market and the financial system.
- The directive may reintroduce financial vulnerabilities seen during the 2023 banking failures, “where crypto-related exposures played a contributing role.”
- There are structural governance weaknesses, as Pulte serves as both FHFA director and chair of the Enterprises’ boards. In addition, the letter states that Pulte’s spouse holds up to $2 million in crypto assets and the senators pressed FHFA to clarify whether Pulte has consulted ethics officials or initiated any recusals or divestitures.
