The Federal Housing Finance Agency (FHFA) wants to drop “reputational harm” as a basis for suspending firms and individuals that do business with Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

In a notice of proposed rulemaking published Monday in the Federal Register, the agency said removing the reputational-harm standard would “eliminate redundancy” and reinforce that counterparty oversight should rest on “material and measurable risks.”

If finalized, FHFA would issue a suspension order only when covered misconduct is likely to cause significant financial harm to a regulated entity or threaten its safe details ⇒

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