Hannah Lang

Fannie hasn't completed any credit risk transfers to private investors since the second quarter. Some experts worry the decision — likely spurred by the company’s concerns about a recent capital regulation — could put the mortgage giant on unsteady footing.

Vice Chairman of Supervision Randal Quarles said the agency wants to figure out why banks are holding on to capital that could be used more aggressively to respond to the pandemic.

The central bank will prolong the life of the Commercial Paper Funding Facility and three other programs while returning congressionally approved funds for five separate facilities that will shut down Dec. 31.

The Trump administration has compelled the Federal Reserve to shut down the Main Street Lending Program and other facilities that aid banks’ pandemic relief efforts, but President-elect Biden’s Treasury nominee could help turn the spigot back on.

Treasury Secretary Steven Mnuchin called on the Federal Reserve Thursday to let several of its emergency lending facilities expire at yearend and return unused funds provided by Congress. But the central bank wants the programs to continue.

With a Democrat set to take the White House in January, the agenda for agencies like the CFPB could undergo a rapid transformation, housing finance reform could be turned on its head and progressive banking ideas that were unthinkable over the past four years could gain traction.

The statement comes after multiple small and midsize institutions earlier this year warned the agencies that the secured overnight financing rate was ill-suited to them.

Defaults have been milder than expected thanks to government relief and stricter underwriting. But with the crisis dragging on and policymakers unable to agree on a stimulus plan, loans to highly indebted companies remain at risk.

The Financial Stability Oversight Council said the mortgage giants may need a bigger capital cushion than their regulator has proposed, but stopped short of designating them as “systemically important financial institutions.”

Commercial real estate companies are among those left out of the Federal Reserve’s middle-market relief program, but House members said they need government-backed financing to navigate the pandemic as much as anyone.