Democratic Senators Raise Concerns Over FHFA Crypto Order

A coalition of high-ranking Senate Democrats is pushing back against Federal Housing Finance Agency (FHFA) Director William Pulte’s recent order that would allow mortgage lenders to utilize unconverted crypto in the underwriting process, according to a new letter sent to the investment firm founder.

According to the July 25 letter, U.S. lawmakers Jeff Merkley, Elizabeth Warren, Bernie Sanders, Chris Van Hollen, and Mazie Hirono claim the move “could introduce unnecessary risks to consumers and pose serious safety and soundness concerns for the U.S. housing and financial markets.”

“To the extent that historical volatility and liquidity persists even as the market matures, a borrower using crypto faces an increased risk that they may not be able to exit a crypto position and convert to cash at a price that would allow them to buffer against risk of mortgage default,” the senators state.

“Crypto is also subject to heightened risks of loss due to scams, cyber hacks, or physical theft, which could leave homeowners vulnerable to losing their crypto assets with little hope of recovery,” they added.

The letter comes shortly after Pulte’s June 25 order directing Fannie Mae and Freddie Mac to prepare a proposal that would consider “cryptocurrency as an asset for reserves in their respective single-family mortgage loan risk assessments” without first being converted to U.S. dollars.

After significant studying, and in keeping with President Trump’s vision to make the United States the crypto capital of the world, today I ordered the Great Fannie Mae and Freddie Mac to prepare their businesses to count cryptocurrency as an asset for a mortgage.

SO ORDERED pic.twitter.com/Tg9ReJQXC3

Proponents argue the shift supports growing mainstream crypto adoption amid broader regulatory changes in the United States.

Former Binance CEO Changpeng ‘CZ’ Zhao praised the move in a post on X last month: “This is great to see, BTC counts as assets for mortgage.”

However, critics warn that the digital asset-focused policy could do more harm than good.

“Expanding underwriting criteria to include the consideration of unconverted cryptocurrency assets could pose risks to the stability of the housing market and the financial system,” the senators conclude.

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