Fannie Mae, Freddie Mac agency leaving green financial group

The regulator for two government-related mortgage investors is leaving the Network of Central Banks and Supervisors for Greening the Financial System, according to the former’s director.

Director Bill Pulte informally circulated the departure on the social media platform X in line with his practice of using that forum to announce new policy. Pulte heads the entity formerly known as the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac.

FHFA, which Pulte refers to as U.S. Federal Housing on first reference, originally became part of the network back in May 2022 under former Director Sandra Thompson’s leadership.

Reflecting broader trends in U.S. politics and policy

The move adds to questions about what has happened to previously considerable U.S. government-related involvement in the market for environmental, social and governance bonds as the Trump administration reprioritizes or dismantles climate change-related initiatives.

FHFA’s departure from the network follows an earlier one by other regulators. The Office of the Comptroller of the Currency departed in February and the Federal Reserve Board announced that it left NGFS in January. The Federal Deposit Insurance Corp. also exited in January.

Such moves also reflect “increasing scrutiny of U.S. regulators’ participation in non-treaty international organizations,” according to a January report by law firm Mayer Brown.

“While the board has appreciated the engagement with the NGFS and its members, the work of the NGFS has increasingly broadened in scope, covering a wider range of issues that are outside of the board’s statutory mandate,” the Fed said in a statement earlier this year.

Federal Reserve Chairman Jerome Powell — an independent official who has resisted some pressure to conform to Trump administration policy  — told Congress during his semi-annual Humphrey-Hawkins testimony that he does see climate risk-related issues affecting housing.

“I don’t know that it’s a financial stability issue, but it certainly will have significant economic consequences,” he told legislators, predicting that within 10-15 years insurer withdrawals from some areas could reach a point where mortgages aren’t available in those regions.

The federal government is currently heading toward a deadline for reauthorizing a federal flood insurance program that provides coverage in some higher-risk areas amid contentious budget discussions.