Government Conservatorship
Conservatorship of Fannie/Freddie
Date:
September 7, 2008
Who:
FHFA
Policy Area:
Sector Policy (Non-Financial)
Economic Target:
Government and GSEs
Action Type:
Government Conservatorship
Deficit Impact:
$389.00 billion Placement of Fannie Mae and Freddie Mac into government conservatorship by the Federal Housing Finance Agency, until the institutions are deemed to have been stabilized. Conservatorship was coupled with other actions to ensure liquidity.
CBO estimates that $291 billion in federal outlays went towards the conservatorship of Fannie and Freddie in 2009, with a projected $98 billion in subsidies over the next 10 years.
Notes:
Deficit impact represents CBO's estimate of the cost of bringing Fannie Mae and Freddie Mac "on-budget" for 2009-2019 (per CBO's proposed budgetary treatment) calculated by assessing the risk-adjusted net present value of Fannie Mae's and Freddie Mac's current net liabilities, plus their subsidy costs for 2009. (http://www.cbo.gov/ftpdocs/108xx/doc10878/01-13-FannieFreddie.pdf).
Conservatorship of U.S. Central and Western Corporate Federal Credit Unions
Date:
March 20, 2009
Policy Area:
Financial Sector Policy
Economic Target:
Financial Institutions
Action Type:
Government Conservatorship
Maximum Amount:
$57.00 billion
Amount Spent:
$5.90 billion
Deficit Impact:
$5.90 billion Takeover of two federal credit unions, US Central and Western Corporate, by regulators of the National Credit Union Administration. On March 20, 2009, both credit unions were placed into conservatorship "to stabilize the corporate credit union system and resolve balance sheet issues." Corporate credit unions do not directly serve customers, but rather play a supporting role for their membership of retail credit unions.
Notes:
Maximum amount is total value of US Central ($34 billion) and WesCorp's ($23 billion) assets. Amount spent and deficit impact are taken from the estimated liabilities of the National Credit Union System Insurance Fund for losses on mortgage-backed securities portfolios at US Central and Western Corporate, as detailed here. Although it is expected that insurance fund losses will eventually be recouped through higher user fees for member credit unions, deficit impact reflects initial insurance fund losses.
