Rosenfeld Full Speed Ahead on Cap Rule?

One week after facing withering congressional criticism, Federal Housing Finance Board Chairman Ronald Rosenfeld dropped several hints at a board meeting that he plans to move ahead and finalize a controversial capital rule that would require the Federal Home Loan Banks to increase their retained earnings.Republican and Democratic members of the House Financial Services Committee urged Mr. Rosenfeld to withdraw the capital rule at a Sept. 7 hearing. But the Finance Board chairman seemed unfazed at the board's meeting this week and commented that a meeting to finalize the capital rule would probably be a very long session due to the number of comment letters the proposal generated. In acknowledging former director Franz Leichter's contributions to the agency and the capital rule, Mr. Rosenfeld said the final rule "will have your fingerprints on it." At the Sept. 13 meeting, the Finance Board approved a final rule to streamline the affordable housing program and establish new rules for FHLBanks to approve and fund out-of-district housing projects. The board also agreed to issue a proposed rule for a 30-day comment period that creates an examiner rating system for FHLBanks. The Finance Board can be found online at http://www.fhfb.gov.