Freddie Mac 2015 Annual Report Download - page 169

Management's Discussion and Analysis Regulation and Supervision
Freddie Mac 2015 Form 10-K 167
obligations not exceeding $2.25 billion in aggregate principal amount at any time.
CONSUMER FINANCIAL PROTECTION BUREAU
The CFPB regulates consumer financial products and services. The CFPB adopted a number of final
rules relating to loan origination, finance, and servicing practices that generally went into effect in January
2014. The rules include an ability-to-repay rule, which requires loan originators to make a reasonable and
good faith determination that a borrower has a reasonable ability to repay the loan according to its terms.
This rule provides certain protection from liability for originators making loans that satisfy the definition of
a qualified loan. The ability-to-repay rule applies to most loans acquired by Freddie Mac, and for loans
covered by the rule, FHFA has directed us to limit our single-family acquisitions to loans that generally
would constitute qualified loans under applicable CFPB regulations. The directive generally restricts us
from acquiring loans that are not fully amortizing, have a term greater than 30 years, or have points and
fees in excess of 3% of the total loan amount.
SECURITIES AND EXCHANGE COMMISSION
We are subject to the reporting requirements applicable to registrants under the Exchange Act, including
the requirement to file with the SEC annual reports on Form 10-K, quarterly reports on Form 10-Q, and
current reports on Form 8-K. Although our common stock is required to be registered under the Exchange
Act, we continue to be exempt from certain federal securities law requirements, including the following:
• Securities we issue or guarantee are “exempted securities” and may be sold without registration
under the Securities Act;
• We are excluded from the definitions of “government securities broker” and “government securities
dealer” under the Exchange Act;
• The Trust Indenture Act of 1939 does not apply to securities issued by us; and
• We are exempt from the Investment Company Act of 1940 and the Investment Advisers Act of 1940,
as we are an “agency, authority or instrumentality” of the U.S. for purposes of such Acts.
LEGISLATIVE AND REGULATORY DEVELOPMENTS
Legislation Related to Freddie Mac and its Future Status
Our future structure and role will be determined by the Administration and Congress, and it is possible,
and perhaps likely, that there will be significant changes beyond the near-term.
Congress held hearings and considered legislation on the future state of Freddie Mac, Fannie Mae, and
the housing finance system during 2015. A number of bills were introduced in Congress in 2015 relating
to the future status of Freddie Mac, Fannie Mae, and the secondary mortgage market. Several of the bills
considered by Congress would have placed us into receivership and materially affected our business prior
to our eventual liquidation. It is likely that additional bills related to Freddie Mac, Fannie Mae, and the
future of the mortgage finance system will be introduced in and considered by Congress. We cannot
predict whether any of such bills will be enacted.
The Equity in Government Compensation Act of 2015 was enacted in November 2015. On December 1,
2015, pursuant to the Act, FHFA directed us to suspend the current compensation package for our CEO