Office of Conservatorship Operations

Most Recent FHFA Conservatorship News On July 30, 2008, President George W. Bush signed Public Law 110-289, the "Housing and Economic Recovery Act of 2008 (HERA)," which established FHFA, giving the agency authority to place regulated entities into conservatorship or receivership.  On September 6, 2008, using the power it had been granted just six weeks before, FHFA placed Fannie Mae and Freddie Mac (Enterprises) into conservatorships.  What is the purpose of conservatorship? The purpose of conservatorship is to preserve and conserve each Enterprise's assets and property and restore the Enterprises to a sound financial condition so they can continue to fulfill their statutory mission of promoting liquidity and efficiency in the nation's housing finance markets.  What are the goals of conservatorship? The goals of the conservatorships are to help restore confidence in the Enterprises, enhance their capacity to fulfill their mission, and mitigate the systemic risk that contributed directly to instability in financial markets. How do the conservatorships operate? Conservatorship is intended to stabilize troubled institutions with the objective of maintaining normal business operations and restoring financial safety and soundness.  As conservator, FHFA has the powers of the management, boards, and shareholders of the Enterprises.  However, the Enterprises continue to operate as business corporations.  While FHFA has very broad authority, the focus of the conservatorships is not to manage every aspect of the Enterprises' operations.  Instead, under conservatorship, FHFA is responsible for the overall management of the Enterprises and has delegated many operational and other duties to the Enterprises' management and boards.  However, the Enterprises must consult with, and obtain approval from, FHFA, as conservator, on critical matters. What is the Office of Conservatorship Operations (OCO)?  In October 2008, after the Enterprises had been placed into conservatorship, FHFA created OCO to coordinate the agency's actions pursuant to the conservatorships.     What does OCO do? OCO's mission is to assist the FHFA Director, as conservator, in preserving and conserving the Enterprises' assets and property and to ensure the Enterprises appropriately focus on their mission.  OCO accomplishes its mission by facilitating communication between the Enterprises and FHFA; ensuring the conservator is involved in, and exercises final approval over, critical matters; keeping the conservator informed of market developments, governance practices, and business and public policy issues facing the Enterprises; and working with the Enterprise boards and management to establish priorities and milestones for accomplishing goals.