OFHEO to Decide Soon on Freddie Capital

The Office of Federal Housing Enterprise Oversight says it will decide next week whether Freddie Mac needs to set aside additional capital until it gets its financial house in order.At a congressional hearing Wednesday morning, OFHEO Director Armando Falcon said "it is my intent to move forward" on the capital issue "by the end of next week." In its recent report on the Freddie Mac accounting scandal, OFHEO said it might assess a special capital charge on the company and limit its portfolio growth. A Freddie spokeswoman said the company looks forward to working with OFHEO on the issue, noting that "we already have capital in excess of our regulatory requirements." Meanwhile, Mr. Falcon told a House subcommittee on government-sponsored enterprises that the agency has not concluded its investigation of Wall Street firms that acted as "counterparties" to Freddie on controversial derivatives transactions. The regulator noted that the agency could ban Freddie from working with certain Wall Street firms if the agency finds wrongdoing on their part.