CRF Secures Another Win: FHFA Repeals Controversial Equitable Housing Rule

On May 27, the CPAC Foundation's Center for Regulatory Freedom (CRF) submitted comments

advocating for the rescission of multiple rules negatively impacting the housing market. Of these rules, CRF highlighted the Federal Housing Finance Agency’s (FHFA) Fair Lending, Fair Housing, and Equitable Housing Finance Plans rule as particularly burdensome, arguing it unfairly penalized smaller lenders while entrenching the dominance of government-backed enterprises. CRF's targeted advocacy was instrumental in shaping the FHFA’s decision to propose repealing the rule, underscoring CRF’s effectiveness in rolling back regulatory overreach and promoting a more competitive, less burdensome housing market. This action marks a significant victory for  CRF’s mission to reduce unnecessary regulations and increase market fairness.

The FHFA implemented the Fair Lending, Fair Housing, and Equitable Housing Finance Plans rule in 2024, requiring government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac to set and report on measurable goals aimed at improving sustainable housing opportunities for underserved communities. 

The rule was initially designed to promote the previous administration’s equity-driven policy goals, yet imposed heavy planning, reporting, and public engagement burdens that disproportionately harmed smaller lenders lacking comparable resources. Additionally, the rule reinforced the market dominance of the GSEs, making it harder for private institutions and smaller firms to compete fairly in the secondary mortgage market.

Action: FHFA has officially proposed repealing the rule, marking a significant policy victory for

CRF’s advocacy to eliminate burdensome regulations that stifle smaller lenders and entrench

government-sponsored enterprises' dominance.

Rationale: Repealing this regulation reduces administrative burdens on lenders and aligns housing

finance oversight with more efficient statutory frameworks, promoting a fairer and more

competitive market.

Support: FHFA’s proposal to repeal the rule highlights the administration’s commitment to

considering public feedback in shaping regulatory reform and advancing deregulatory priorities.

Call to Action

To sustain and build on recent deregulatory successes like the repeal of the burdensome Fair

Lending, Fair Housing, and Equitable Housing Finance Plans rule, agencies should continue to

actively leverage the notice-and-comment process to solicit and incorporate public feedback.

This approach has proven effective in identifying problematic regulations that stifle competition and impose unnecessary burdens, especially on smaller lenders. We urge FHFA and related agencies to maintain this momentum by systematically reviewing existing rules and repealing those that undermine market fairness and efficiency. CRF’s strategic advocacy has secured key policy victories across multiple agencies and will continue to champion pro-market regulatory reforms across the federal landscape.