Senate Democrats Challenge FHFA Over Crypto in Mortgage Assessments

Senate Democrats are intensifying scrutiny of the Federal Housing Finance Agency's controversial proposal to incorporate cryptocurrency holdings into mortgage risk evaluations. Led by Senator Jeff Merkley, a coalition of five lawmakers has demanded clarity from FHFA Director William Pulte, citing concerns over market volatility and potential systemic risks.

The bipartisan pushback highlights growing regulatory unease with crypto's integration into traditional finance. Current FHFA policy mandates conversion to fiat currency before mortgage consideration—a safeguard the new directive appears to circumvent. Senators Warren, Sanders, and colleagues have set an August 7 deadline for detailed justification of the plan.

This development signals a critical inflection point for digital asset adoption. While proponents view mortgage integration as validation of crypto's maturation, skeptics warn premature institutional acceptance could expose the housing market to unnecessary instability. The FHFA's response may establish precedent for how regulators balance innovation with consumer protection in evolving financial markets.