The Federal Housing Finance Agency (FHFA) has issued a Notice of Proposed Rulemaking to repeal 12 CFR part 1293, a regulation previously titled "Fair Lending, Fair Housing, and Equitable Housing Finance Plans".
This proposed repeal is driven by the FHFA's aim to enhance prudence and financial responsibility, alleviate unnecessary regulatory burdens, avoid confusion and duplication of effort with other agencies that have primary jurisdiction, and align with current Administration policy. If implemented, this deregulatory action would primarily affect the FHFA's regulated entities: Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBanks), by removing specific FHFA-mandated fair housing and lending planning, reporting, and data collection requirements.
However, it is crucial to note that this repeal would not diminish the regulated entities' (or other lenders') underlying obligations to comply with core fair lending and housing laws administered by other federal agencies.
Here is a summary of the proposed rule and its potential implications for bankers.
Summary of the Proposed Rule
- Agency Proposing the Rule: The Federal Housing Finance Agency (FHFA).
- Action: Notice of proposed rulemaking to repeal 12 CFR part 1293. This part is titled "Fair Lending, Fair Housing, and Equitable Housing Finance Plans".
- Purpose of Repeal: The FHFA is proposing this repeal to enhance prudence and financial responsibility in the expenditure of funds, alleviate unnecessary regulatory burdens, avoid confusion regarding roles and responsibilities with other agencies having primary jurisdiction, avoid duplicative statements of FHFA authorities, and align with current Administration policy.
- Key Content of Part 1293 (being repealed): It previously required regulated entities (Fannie Mae, Freddie Mac, and Federal Home Loan Banks or FHLBanks) to comply with certain fair lending and housing laws, imposed a specific duty on directors related to compliance, included requirements for Enterprise equitable housing finance planning, and mandated certain data collection and reporting.
- Publication and Comment Period: The proposed rule was published on July 28, 2025, and the FHFA will accept written comments on it until September 26, 2025.
Potential Implications for Bankers
If the proposed rule is implemented, it would largely affect the Federal National Mortgage Corporation (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the Federal Home Loan Banks (FHLBanks), referred to as "regulated entities". The FHFA certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities because it applies only to these large regulated entities.
Here's what it would do if implemented:
- Reduce Regulatory Burden and Costs for Regulated Entities: The repeal is expected to result in significant decreases in compliance and programmatic costs for Fannie Mae and Freddie Mac, particularly by removing the requirements to develop, execute, and report on Equitable Housing Finance Plans (Subpart C). It would also reduce administrative burden for the FHLBanks by eliminating the need to define "voluntary actions," collect data, prepare narratives, and secure officer declarations for voluntary reports.
- Eliminate Redundant Compliance Requirements: Sections 1293.11(a) and (b) currently require regulated entities to comply with statutes administered by other agencies, such as the Fair Housing Act (administered by HUD), the Equal Credit Opportunity Act (ECOA, administered by CFPB), and the Federal Trade Commission (FTC) Act (administered by FTC). The repeal would remove these unnecessary and redundant FHFA requirements, as the administering agencies for those statutes already have their own regulatory requirements in place.
- Remove Specific Director Duties and Reporting Duplication: The rule would repeal the specific duty for directors under §1293.11(c) to direct operations in conformity with certain laws, as FHFA's existing corporate governance regulations and recent caselaw already establish similar oversight responsibilities for directors. Additionally, it would remove reporting requirements under §1293.12(a) and certification requirements under §1293.12(b), as FHFA already has statutory authority to require reports.
- End Equitable Housing Finance Planning: Subpart C, which mandates that Fannie Mae and Freddie Mac develop, execute, and report on Equitable Housing Finance Plans, would be repealed. The FHFA believes these requirements could conflict with current administration policies that seek to terminate discriminatory and illegal preferences, programs, and activities, and combat illegal private-sector diversity, equity, and inclusion preferences.
- Stop Certain Data Collection and Reporting: Section 1293.41, which requires Enterprises to collect and provide single-family mortgage data on borrower/applicant language preference and homeownership education, would be removed. FHFA argues this is unnecessary because adequate alternatives exist, and the mortgage industry's standards development body, MISMO, already engages in collecting and using mortgage-related data.
- Cease Voluntary Reporting for FHLBanks: Sections 1293.31 and 1293.32, which require FHLBanks to report on voluntary actions to support underserved communities, would be repealed. The FHFA believes the FHLBanks' existing statutorily required Affordable Housing Programs (AHPs) and Community Investment Programs provide adequate means for them to carry out their statutory purposes, rendering separate voluntary reporting unnecessary.
CRITICALLY, here's what it would NOT affect in terms of lenders' fair lending obligations:
- The FHFA explicitly states that the repeal of part 1293 is not intended to affect the applicability, effectiveness, or enforcement of those laws administered by other agencies with respect to the regulated entities. This means that while FHFA will no longer redundantly require compliance with certain fair lending and housing laws through part 1293, the regulated entities (and by extension, the lenders they work with) remain legally obligated to comply with the Fair Housing Act, ECOA, the fair housing provisions of the Safety and Soundness Act, and the FTC Act's prohibition against Unfair or Deceptive Acts or Practices (UDAP), as enforced by their respective primary administering agencies (HUD, CFPB, FTC).
- The FHFA retains all authority, and continues to exercise general regulatory, examination, and enforcement authorities over its regulated entities to ensure they are operated in a safe and sound manner, comply with applicable law, and fulfill their public purposes.
- The regulated entities remain subject to longstanding statutory obligations to support access to credit in underserved markets, primarily through the Affordable Housing Goals, their duty to serve underserved markets, and affordable housing allocation requirements. The FHFA is committed to continuing to ensure that Fannie Mae and Freddie Mac serve the needs of low-income and very low-income families through statutorily authorized activities
Docs available here:
https://www.federalregister.gov/documents/2025/07/28/2025-14183/fair-lending-fair-housing-and-equitable-housing-finance-plans