Sponsor
Bill Foster
Representative · D-IL
The bill strengthens federal oversight of outsourced services used by housing finance entities—reducing risk to consumers and taxpayers—but increases compliance burdens, may introduce regulatory overlap, and could remove or create uncertainty around existing protections for credit unions and their members.
Homeowners, mortgage borrowers, and taxpayers: the FHFA can examine outsourced service providers used by regulated housing finance entities, improving oversight and reducing the risk of service failures that could produce consumer losses or taxpayer costs.
State regulators and consumers: the bill preserves state authorities’ ability to exercise their powers over persons and entities, maintaining state‑level consumer protection and enforcement pathways.
Federal credit unions and similar financial institutions: statutory language changes in the bill may simplify or clarify compliance obligations, potentially reducing legal ambiguity for those institutions.
Members of federal credit unions and the institutions themselves: deleting subsection (f) could remove existing duties, authorities, or consumer protections, creating regulatory gaps and reducing safeguards or recourse for members.
Regulated housing finance entities, their customers, and taxpayers: new FHFA notification and examination requirements — plus ambiguous textual changes elsewhere — will raise compliance, reporting, and legal‑interpretation costs for firms and regulators.
Small service providers and vendors: expanding FHFA examinability and related oversight could impose substantial regulatory burdens and costs on smaller vendors, costs that may be passed to consumers or reduce vendor availability.
Based on analysis of 3 sections of legislative text.
Subjects third-party service providers working for FHFA-regulated entities to FHFA examination and requires entities to notify FHFA within 30 days of new service contracts; makes narrow FCU Act edits.
Representative · D-IL
Official title: To amend the Federal Credit Union Act to modify requirements relating to the regulation and examination of credit union organizations and service providers, to provide the Director of the Federal Housing Finance Agency with the authority to regulate the provision of services provided to the Government-sponsored enterprises and Federal Home Loan Banks, and for other purposes.
Introduced September 2, 2026 by Bill Foster · Last progress September 2, 2026
Subjects certain third-party service providers for federal mortgage regulator examinations and requires banks or regulated entities to notify the Federal Housing Finance Agency (FHFA) when they enter service contracts. It also makes narrow edits to the Federal Credit Union Act that change wording and remove one subsection. The bill treats work performed for a regulated entity or the Office of Finance by a service provider—whether on or off site—as subject to FHFA regulation and examination as if done by the entity itself, and creates a 30-day notice requirement for regulated entities to report new service relationships to the FHFA Director. It preserves State authority over persons or entities to the extent States already have jurisdiction.