A coalition of Senate Democrats are demanding answers from Federal Housing Finance Agency (FHFA) Director William Pulte regarding his controversial directive to explore how cryptocurrency could be integrated into mortgage application risk assessments.
In a letter sent Friday, Senators Jeff Merkley, Elizabeth Warren, Chris Van Hollen, Mazie Hirono, and Bernie Sanders urged the FHFA to clarify its position on the matter. They asked Pulte to explain how his agency intends to evaluate the potential risks and benefits of counting crypto holdings—without conversion to U.S. dollars—when assessing eligibility for federally backed mortgages through Fannie Mae and Freddie Mac.
The senators expressed concern that such a policy could introduce volatility into the housing market. They argued that cryptocurrencies, known for their unpredictable price swings and susceptibility to fraud or theft, may place homeowners at heightened risk of default. Current federal rules prevent lenders from factoring in crypto unless it’s first liquidated into fiat currency.
Pulte’s order, issued last month, instructed Fannie Mae and Freddie Mac to present proposals evaluating the inclusion of crypto assets in single-family mortgage loans. Both entities have been under government conservatorship since the 2008 financial crisis, and the senators warned that Pulte’s order could reverse hard-earned financial safeguards.
Senators demand transparency amid conflict of interest concerns
The letter also raised red flags about potential conflicts of interest. The lawmakers pointed to Pulte’s personal ties to the crypto industry through his spouse, who reportedly holds up to $2 million in digital assets. Additionally, the Trumps were cited for their alleged connections to crypto-related businesses, including trading platforms and stablecoins, leading to fears of political influence over FHFA operations.
The senators claim Pulte’s directive lacks transparency, offering no clear framework for how proposals will be evaluated or public feedback gathered. They also called attention to the FHFA’s prior shortcomings in crypto oversight, particularly during the 2023 banking crisis, which they say was worsened by digital asset exposure.
The group has requested a formal response from Pulte by August 7, including internal communications and details on how he will address potential conflicts and board-level approvals.