Amid sweeping changes of U.S. housing oversight by Federal Housing Finance Agency (FHFA) Director William J. Pulte, a group of Congressional Senators have voiced their concerns over these actions.
In a letter led by Sen. Jack Reed, a contingent of five U.S. Senators voice their opinion on the legality of FHFA Director Pulte streamlining the agencies that oversee the nation’s near $50 trillion housing market through layoffs, dismissals, and office closures. Recently, Freddie Mac CEO Diana Reid, Head of Human Resources Dionne Wallace Oakley, and EVP of Corporate Strategy and External Affairs Craig Phillips were dismissed from their roles, as well as FHFA COO Gina Cross, FHFA Human Resources Director Monica Matthews, and FHFA’s Office of Congressional Affairs and Communications Antonio White were placed on leave.
“Within a week of taking office, you fired the Chief Executive Officer of Freddie Mac and you removed a majority of the nonpartisan directors of both Freddie and Fannie Mae, installing yourself, your business associates, and partisan loyalists in their place,” said Sen. Reed in his letter. “Congress and the American people deserve an explanation for these actions, which do not appear to be consistent with Federal law or regulation.”
Pulte leads the FHFA, which was established by the Housing and Economic Recovery Act of 2008 to oversee Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System, which collectively provide more than $8.5 trillion in funding for U.S. mortgage markets and financial institutions. The FHFA serves as regulator and conservator of Fannie Mae and Freddie Mac, and regulator of the Federal Home Loan Banks.
In addition to Sen. Reed, the letter was signed by Sens. Elizabeth Warren (Ranking Member Committee on Banking, Housing, and Urban Affairs); Lisa Blunt Rochester; Chris Van Hollen; Tina Smith; and Catherine Cortez Masto.
“In addition to naming individuals who appear wholly unqualified to serve, the manner in which you have reconstituted the boards appears to violate Federal law and FHFA’s own regulations,” continued Sen. Reed in the letter. “Most notably, Federal law prohibits the FHFA Director from holding any office, position, or employment in Fannie and Freddie. Additionally, FHFA’s regulations require the chairmen of the boards of Freddie and Fannie to be independent of FHFA. Despite these prohibitions, you named yourself as the chairman of both boards.”
To resolve any further concerns, Sen. Reed suggested immediate action to be taken in regards to his actions since taking office.
“To restore any confidence, FHFA’s lack of compliance must corrected immediately. You should appoint qualified, independent board members and leaders, and you must provide a full explanation of the rash actions you took in the first few days on the job,” suggested the letter. “With the Nation’s secondary mortgage market on the line, Congress and the American people deserve complete transparency, as well as steady leadership at FHFA, Fannie, and Freddie.”
A second letter, led by Sen. Lisa Blunt Rochester, took aim at Director Pulte’s plans regarding the future of the FHFA, as well as the conservatorships of Fannie Mae and Freddie Mac. The FHFA recently placed approximately 60 employees from its Research and Statistics Division on administrative leave.
“Given the critical importance of maintaining clarity and stability in our housing finance system, we were concerned by the sudden changes you have made to FHFA and the Enterprises,” said Sen. Blunt Rochester in the letter. “You forced out two senior FHFA executives, including the agency’s Chief Operating Officer and “placed 35 unionized [FHFA] employees on administrative leave,” including employees in the Offices of Consumer Protection, Statistics and Research, and Equal Opportunity and Fairness.”
Joining Sen. Blunt Rochester in signing the letter were Sens. Reed, Cortez Masto, and Warren, as well as Sens. Charles E. Schumer, Tina Smith, Ron Wyden, and Andy Kim.
In seeking clarity on the future of the FHFA and the GSEs, the letter posed eight questions they requested replies to, including:
- Why did FHFA recently alter the makeup of Fannie and Freddie’s boards? Please provide details on individuals fired and added to each board and why, as well as information on whether any DOGE employees, volunteers, or affiliated individuals were involved in the decision to overhaul Fannie and Freddie’s boards.
- Does your appointment as Chair of Fannie Mae and Freddie Mac’s boards comply with 12 USC 4512(g)? What legal analysis, if any, did FHFA conduct in advance of appointing you to the boards?
- What access, if any, have DOGE officials received to data housed at FHFA, Fannie Mae, or Freddie Mac? What federal laws, regulations, and agency policies and procedures govern access to this data, and were those laws, regulations, and policies and procedures followed in granting access (if applicable)?
- How many FHFA employees are currently on administrative leave? Which FHFA components are these employees from? How does placing these employees on administrative leave impact the FHFA’s ability to comply with its statutorily mandated functions? What impact, if any, does the decision to place these employees on administrative leave have on the stability of the housing finance system?
- What specific public engagement process will you follow if the Trump Administration considers any changes to the Enterprises’ conservatorship status? Your response should include specific timelines and forums for receiving, considering, and responding to public feedback, and what steps you will take to ensure that members of Congress—including all members of the U.S. Senate Committee on Banking, and Housing and Urban Affairs and the U.S. House Committee on Financial Services—are fully briefed and given a meaningful opportunity for input at multiple points throughout that process.
- If you decide to end the conservatorships of Fannie and Freddie, will you seek to do so through administrative action or through legislation by Congress? In your view, what conditions are necessary before ending the conservatorships? Are there any congressional actions that are necessary prior to ending the conservatorships?
- If Fannie and Freddie were released from conservatorship, do you anticipate that credit ratings for their products would be downgraded? If so, how much do you estimate that their ratings would be downgraded by and how would that rating downgrade affect investors’ willingness to purchase their securities? How would this affect mortgage rates for homebuyers?
- Can you commit to the American people that any efforts to release Fannie and Freddie from conservatorship will not raise housing costs?
Both letters, the letter led by Sen. Reed and the letter led by Sen. Blunt Rochester, were submitted to FHFA Director Pulte on March 31, 2025.
