Shutdown ends, but key economic data may be forever lost
Plus, Fannie Mae tosses minimum credit score requirements; FHFA’s inspector general is fired; Treasury Secretary says Fed can end “housing recession”; more.
Key points:
- The shutdown affected several federal housing-related programs and decreased consumer confidence.
- The FHFA is close to implementing a new FICO score, while its inspector general — the agency’s watchdog — was removed.
- The CFPB may lose access to federal funds, effectively shuttering the agency by year-end.
On Nov. 12, the House of Representatives voted to end the longest-running U.S. government shutdown in history. The vote came days after Republicans struck a deal with a handful of moderate Democrats in the Senate.
The shutdown disrupted federal loan programs, lapsed National Flood Insurance Program authorization and caused consumer confidence to falter. The funding bill now heads to President Donald Trump's desk for his signature.
Elsewhere in Washington, D.C., a Federal Reserve governor insists the central bank is "not flying blind" despite shutdown-related economic data delays, while Treasury Secretary Scott Bessent suggests it's up to the Fed to dig the housing market out of a recession.
Meanwhile, the Federal Housing Finance Agency (FHFA) is considering a slew of changes to mortgage lending, and the Consumer Financial Protection Bureau's (CFPB) days appear to be numbered.
A 'housing recession'?
Bessent indicated that while the housing market may be in a recession, the Fed has the power to fix it.
Overall, the U.S. economy is "in good shape," he said during an appearance on CNN earlier this month, "but I think that there are sectors of the economy that are in recession."
"We've seen that the biggest hindrance for housing here are mortgage rates," Bessent explained. "If the Fed brings down mortgage rates, then they can end this housing recession."
The Fed doesn't set mortgage rates, though its monetary policy decisions often impact how rates rise and fall. But rates didn't drop when the Fed cut short-term interest rates in October because the widely anticipated cut was already priced in, economists have said.
While a third cut this year is still possible, it's unclear how much it would impact rates.
Fed is 'not flying blind'
In her first speech since President Donald Trump tried to fire her, Fed Governor Lisa Cook acknowledged the shutdown's impact on the release of key economic data that helps guide the central bank's decisions. The White House now says October's missed Consumer Price Index (CPI) and jobs reports will "likely never" be released.
But "we are not flying blind," Cook said earlier this month, noting that the Fed uses "a wide variety of data" to "continually evaluate the state of the economy in real time."
"Looking ahead, policy is not on a predetermined path," she said, echoing similar comments that Fed Chair Jerome Powell made last month.
FHFA considers new FICO score, ousts inspector general
FHFA Director Bill Pulte suggested the agency is "very close to a deal" to start implementing FICO's 10T credit scoring model. If it goes through, the deal "would be great for consumers and the safety of the mortgage market, to have both FICO 10T Score and Vantage Score 4.0," Pulte wrote on X.
The agency validated both credit scoring models in 2022. Fannie Mae and Freddie Mac began accepting VantageScore 4.0 credit scores over the summer.
Meanwhile, the staffing shakeups that began shortly after Pulte took control of the FHFA have continued, most recently with the ouster of FHFA's acting inspector general, Joe Allen. Allen was removed amid plans to notify Congress of the agency's lack of cooperation with the internal watchdog, according to Reuters.
Ethics officials at Fannie Mae were also reportedly fired last month in connection with an investigation into how Pulte obtained mortgage documents of elected officials, according to The Wall Street Journal.
Fannie Mae drops minimum credit score requirement
Mortgage applications submitted through Desktop Underwriter, Fannie Mae's automated loan underwriting system, will no longer need to meet a minimum credit score requirement, HousingWire reported.
"The minimum representative credit score requirement of 620 for loan casefiles for one borrower and minimum average median credit score requirement of 620 for more than one borrower will be removed for new loan casefiles" starting Nov. 16, Fannie Mae announced.
Other mortgage lending changes could be on the horizon. Trump recently floated the idea of creating a 50-year mortgage, and Pulte said the administration is also "actively evaluating portable mortgages."
CFBP out of options?
After months of efforts to gut the CFPB, the Trump administration has suggested that the bureau no longer has a legal source of funding.
In a Nov. 10 court filing, the Department of Justice's Office of Legal Counsel wrote that the CFPB cannot continue to be funded by Fed revenue since the central bank is operating at a loss, according to Politico.
"If the Federal Reserve has no profits, it cannot transfer money to the CFPB," the filing said. The CFBP "anticipates exhausting its currently available funds in early 2026," the filing added.
The administration has already said it plans to "close down the agency," a process that Office of Management and Budget Director Russell Vought estimated would take two to three months.