Trade groups representing banks are unhappy with some of the changes FHFA is making to Federal Home Loan Bank practices.

Because deposits at the Federal Reserve don’t earn interest, FHLBanks’ use of IBDAs at large banks with high credit has expanded over the last few years. FHFA wants to give those deposits a capital treatment equivalent to that given to overnight Fed funds sales.

Two of the new proposed rules are directed at Fannie Mae and Freddie Mac. The other three relate to the Federal Home Loan Banks.

Researchers say strategic securitization by lenders exposes the GSEs to higher insurer counterparty risk, especially in regions with frequent climate-related disasters. The proposed cure: LLPAs and capital rules that compensate the GSEs for this risk.

The Federal Housing Finance Agency last week joined the OCC, FDIC and NCUA in reproposing a rule that will prohibit incentive-based compensation agreements.

The Federal Reserve published a hypothetical economic collapse for banks to use in their annual stress test this year. The same scenario might be used by FHFA for Fannie Mae and Freddie Mac.

Freddie and lender trade groups circled the wagons in opposition to many of the mortgage-related provisions in a proposed rule to change capital requirements for large banks.

Fed researchers model an economy in which safe, stable agency MBS are the instigators of market turmoil and financial crisis.

The former FHFA director says Congress will never act, but that the GSEs should create subsidiaries, then complete an initial public offering to get out of government control.

Alberto Musalem, a director on the Freddie Mac board, will soon have a seat at the table of the Federal Open Market Committee.