Prior Approval

The GSEs have a long and distinguished record of innovation. Whether we're talking about the creation of new securities, new mortgage products, or new technologies, GSE innovations have brought incalculable benefits to the mortgage market and homebuyers. Superimposing thickets of government red tape on this process is a sure way to slow things down – if not shut them down altogether. For example, many have called for the GSEs to develop so-called subprime "rescue" products and we're interested in doing just that. However, overburdening GSE product development with excessive comment and approval requirements could greatly slow our ability to bring this needed product to market.

Our Position

In our view, the Director's prior approval authority should only apply to major changes in GSE offerings to ensure compliance with our charter and safety and soundness. Although a bureaucratic prior approval process may offer a competitive benefit to individual market participants, there is no discernible public benefit to crippling our ability to innovate, compete, and respond to our customer's needs as we do routinely in our everyday business.