A group of U.S. Senate Democrats has launched an investigation into Federal Housing Finance Agency (FHFA) Director William Pulte over his proposal to incorporate cryptocurrencies into mortgage assessment processes. The initiative, which could significantly reshape access to housing finance, has sparked concerns about potential risks to financial stability.
Letter With Demands and Warnings
Five senators — including Jeff Merkley, Elizabeth Warren, and Bernie Sanders — sent an official letter to Pulte, requesting clarification on how the FHFA plans to factor in crypto assets when evaluating home loan applications. Pulte was given a deadline of August 7 to respond with a full explanation of the potential impact on the housing market and the financial system.
Lawmakers warn that such a proposal could “increase risks to consumers” and potentially destabilize the housing sector, especially if cryptocurrencies are not first converted to U.S. dollars before being considered.
What’s Being Proposed?
Under Pulte’s direction, mortgage giants Fannie Mae and Freddie Mac were ordered to develop frameworks that would allow crypto to be considered in assessing borrowers’ financial positions. Currently, existing guidelines require that crypto assets be liquidated into fiat currency before they are recognized in mortgage decisions.
Democrats highlight the extreme volatility and limited liquidity of cryptocurrencies, as well as the growing risk of loss through fraud or cyberattacks. “Consumers may be unable to quickly convert their crypto into cash in times of need,” the letter states.
Possible Conflicts of Interest and Trump Ties
The investigation is not just about the technological implications — it also focuses on potential conflicts of interest. Senators pointed out that Pulte’s wife reportedly holds up to $2 million in crypto, raising questions about impartiality. Additionally, they cited Donald Trump’s expanding influence in the crypto industry — from tokens and stablecoins to mining operations and memecoins.
The FHFA’s role is especially important here, as Pulte also chairs the boards of Fannie Mae and Freddie Mac. This dual role may give him direct influence over how these crypto proposals are implemented — a concern shared by the lawmakers.
Lack of Transparency
Democrats are demanding greater detail on how these proposals will be drafted and how public feedback will be collected. They argue the current order lacks a clear process and is particularly worrying in light of past failures to oversee crypto-related activities — such as the 2023 banking crisis, which saw the collapse of three banks partly due to crypto exposure.
They also referenced a 2021 internal report by Fannie Mae, which found that using crypto or stablecoins for deposits, payments, or collateral was “among the least attractive applications” of blockchain in the housing sector.
#crypto , #Regulation , #USPolitics , #DigitalAssets , #Stablecoins
Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies!
Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“
