As an additional measure against fraud, the FHFA announced an initiative requiring Fannie Mae, Freddie Mac, and the Federal Home Loan (FHL) Banks to notify the agency when an act of fraud is committed by an individual or company the regulated entities conduct business with.
The initiative is called the Suspended Counterparty Program and will take effect August 15, 2012. The FHFA stated it is taking this additional step to ensure the regulated companies are not exposed to unnecessary risk from business dealings involving those who have a history of fraudulent conduct.
If an individual or company is found to be involved in fraudulent activity, FHFA will determine if the party should be suspended from doing business with the GSEs or the FHLBanks.
There will be an opportunity for those found to be involved with fraud to explain why they should be able to continue conducting business with one of the FHFA-regulated companies.