Five US Senate Democrats are probing the head of the housing finance agency over plans to consider crypto in the mortgage approval process. Concerns raised over potential risks to consumers and the financial system. Senators seek clarity on the order by August 7, citing conflicts of interest and lack of oversight in the past.

FHFA director William Pulte ordered Fannie Mae and Freddie Mac to prepare a proposal on assessing crypto holdings in mortgage risk assessments. Senators express worries about the volatility and liquidity risks associated with crypto, suggesting that borrowers using crypto may face increased risks of mortgage default.

Senators express concern that the order to consider crypto in mortgage determinations could introduce unnecessary risks to consumers and the housing market. They question how conflicts of interest will be prevented, especially regarding ties to President Trump and his family. Financial disclosures reveal Pulte’s spouse holds up to $2 million in crypto.

Senators criticize the vagueness of Pulte’s order, calling for more clarity on how Fannie Mae and Freddie Mac will develop a proposal and assess risks and benefits. They highlight previous failures in overseeing crypto-related activities and potential risks to the financial system. Fannie Mae found that using crypto for deposits or payments was the least appealing application of blockchain technology in the industry.

Read more at Cointelegraph: Dems Want Answers On Plan To Consider Crypto For Mortgages