This story appeared in Bank Digest.
The Federal Housing Finance Agency has issued orders to Fannie Mae, Freddie Mac, and the Federal Home Loan Banks requiring them to report annual stress test results as of Dec. 31, 2016, in accordance with the Dodd-Frank Act. The agency has also issued Summary Instructions and Guidance to Fannie Mae, Freddie Mac, and the FHLBs, regarding these stress tests.
The Dodd-Frank Act requires certain financial companies with total consolidated assets of more than $10 billion, and which are regulated by a primary federal financial regulatory agency, to conduct annual stress tests to determine whether the companies have sufficient capital to absorb losses and support operations during adverse economic conditions. The FHFA has aligned its stress test scenario variables and assumptions with those used by the Federal Reserve Board in its annual Dodd-Frank Act stress tests.