The Federal Housing Finance Agency (FHFA) seeks comment on a proposed rule amending its Suspended Counterparty Program (SCP) regulation. The proposed rule authorizes the suspension of business between regulated entities and counterparties who are found to have committed misconduct “in the context of civil enforcement actions or who are found to have committed criminal or civil misconduct in connection with the management or ownership of real property.”
The new rule also authorizes the FHFA to suspend business between regulated entities and counterparties where the misconduct has resulted in debarment, suspension, or limited denial of participation imposed by a federal agency. The FHFA can do so immediately and without first issuing a proposed suspension order, but only when the suspension is based on an administrative sanction.
“Amending the Suspended Counterparty Program will help strengthen FHFA’s ability to protect its regulated entities from business risks presented by individuals or institutions who engage in misconduct,” FHFA Director Sandra Thompson said in a release. “The proposed rule will strengthen FHFA’s ability to ensure the regulated entities remain safe and sound so they continue to serve as reliable sources of liquidity.”
The SCP requires the agency’s regulated entities to submit a report if they become aware an individual or institution with which it does business has been found to have committed certain forms of misconduct within the past three years and authorizes the FHFA to issue orders directing entities to cease or refrain from doing business with certain counterparties, subject to provided terms.
Comments by interested parties are due 60 days after the proposed rule is published in the Federal Register.
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