Introduction
In a significant move that has sparked controversy, U.S. lawmakers are raising alarms about the federal government’s initiative to incorporate cryptocurrency assets into the mortgage underwriting process. This strategy, endorsed by the Federal Housing Finance Agency (FHFA), has come under fire as it could potentially destabilize the U.S. housing finance infrastructure, according to several senators who have expressed their concerns.
Legislative Concerns
The legislators, including Senators Jeffrey Merkley, Elizabeth Warren, Chris Van Hollen, Mazie Hirono, and Bernie Sanders, sent a letter to FHFA Director William Pulte on July 24, 2025, demanding comprehensive information regarding his recent directive from June 25. This directive requests Fannie Mae and Freddie Mac to start recognizing verified cryptocurrency assets from U.S.-regulated exchanges as valid for mortgage applications.
Request for Clarity
In their correspondence, the senators sought clarity on several issues, including:
- The FHFA’s full risk assessment related to this policy change.
- The procedures for board approvals.
- The criteria that will determine which cryptocurrencies can be considered eligible.
They also insisted on garnering a complete list of meetings connected to this decision, asking for the identities of any federal regulators or independent consultants involved and steps that are being taken to avoid conflicts of interest.
Financial Risks and Governance Concerns
The senators noted that altering the underwriting criteria to include cryptocurrency could amplify the financial risks facing both the housing market and the broader financial system. This apprehension is steeped in recent experiences, such as the banking shortcomings observed in 2023, during which it became apparent that exposure to cryptocurrency could be detrimental.
Moreover, they flagged governance concerns stemming from Pulte’s simultaneous roles as FHFA Director and Chair of the Enterprises’ Boards, questioning the independence of decision-making processes. The senators highlighted a potential conflict regarding Pulte’s spouse, who possesses up to $2 million in cryptocurrency assets, and urged clarification on whether he had consulted with ethics officials concerning potential conflicts.
Transparency and Risk Management
While the senators emphasized the need for transparency, they noted the restricted nature of the directive, which only encompasses cryptocurrencies stored on recognized U.S. exchanges. They did acknowledge that the FHFA has asked the Enterprises to establish independent mechanisms to manage any associated risks.
Advocacy for Cryptocurrency
On the other hand, advocates of cryptocurrency argue that carefully integrating these digital assets could broaden access to mortgages for a new generation of borrowers who are digitally savvy, thus aligning lending practices with contemporary asset management trends. As this debate unfolds, the implications for both the housing market and the future of cryptocurrency in finance remain to be seen.
