The Trump administration laid out its vision for releasing Fannie Mae and Freddie Mac from more than a decade of federal control, issuing a long-awaited plan that marks the government’s boldest step yet toward closing one of the final chapters of the 2008 financial crisis, Bloomberg News reported. The proposal released yesterday by the Treasury Department suggests dozens of reforms to protect Fannie and Freddie from another housing crash, shrinking their dominant market shares and creating new competitors to the companies that backstop about $5 trillion of home loans. Yet, it is only an initial step in what still would be a long and arduous road to freeing the companies from the government’s grip. While Treasury has outlined broad goals, some of the trickiest questions about how to fix Fannie and Freddie remain unanswered. In a sign of the long process ahead, Treasury acknowledged that specific details involved in releasing the companies, such as determining how they will raise capital to weather an economic calamity, still need to be negotiated across multiple government agencies.
