In January 2021, the FHFA issued a request for input to better understand climate risk and its impact on GSEs. Following is an excerpt from the introduction:
“The Federal Housing Finance Agency (FHFA or the Agency) is seeking information on the current and future climate and natural disaster risk to the housing finance system and to the regulated entities: Fannie Mae and Freddie Mac (the Enterprises) and the Federal Home Loan Banks (the FHLBanks). This information will enhance FHFA’s ability to fulfill its statutory responsibilities to ensure that the regulated entities (i) operate in a safe and sound manner, (ii) fulfill their statutory missions, and (iii) foster the liquidity, efficiency, competitiveness, and resiliency of the national housing finance markets. FHFA also seeks input on opportunities to strengthen its supervision and regulation of the regulated entities’ management of and reporting on the physical and transition risks that may arise from natural disasters and changes in climate patterns.”
We were eager to participate, especially since one of our core missions at DeltaTerra is to assist GSEs and regulators in understanding how critical their leadership will be in safeguarding financial markets from the complex, destabilizing forces of unseen climate risk. Our response is available below and published on the FHFA website here.
Published on April 27, 2021.