Small lenders see the GSE capital question as very straightforward.

First, they are concerned the capital rule may be too conservative relative to actual risks. They'll continue to work on this going forward.

But on the general question of capital on the books, it's not 1/

a close call. To protect taxpayers, the MBS bid market, and consumers, AND the small lenders dependent on the GSEs for fair pricing....the GSEs need MUCH MORE capital on the books. This is not a debatable point, anywhere.

So the question remains: how to get there? 2/

Should we just wait for retained earnings to build? Small lenders say no, because in the YEARS it takes to get there, a large negative economic event CAN and WILL happen, depleting the inadequate capital & destabilizing the entire US secondary, which in turn harms taxpayers, 3/

MBS bids, homebuying families, and small lenders.

So the GSEs need lots of capital sooner, not later.

How to get there?

Will investors come out of the blue to put major $$ into cos run by the gov't, sitting on a loan that's been paid back but still sits at the top of the 4/

"capital stack"? Well...does anyone know of such people?

Reasonable observers say that such people do not exist.

So, how to get there?

In a way that comports with the statute? And follows economic logic? And protects all?

How do we get there? @USTreasury @FHFA 5/

(P.S. The above presumes of course that the LOC remains in place, and is paid for via a commitment fee.) 6/End