The Federal Housing Finance Agency (FHFA) and the Department of the Treasury agreed last week to reinstate the $3 billion capital reserve each for both Fannie Mae and Freddie Mac.

“The FHFA, as conservator of Fannie Mae and Freddie Mac, and the Department of the Treasury have agreed to reinstate a $3 billion capital reserve amount under the Senior Preferred Stock Purchase Agreements for each Enterprise beginning in the fourth quarter of 2017,” FHFA Director Melvin Watt said in a statement. “While it is apparent that a draw will be necessary for each enterprise if tax legislation results in a reduction to the corporate tax rate, FHFA considers the $3 billion capital reserve sufficient to cover other fluctuations in income in the normal course of each enterprise’s business. We, therefore, contemplate that going forward enterprise dividends will be declared and paid beyond the $3 billion capital reserve in the absence of exigent circumstances.”

House Financial Services Committee Chairman Jeb Hensarling (R-Texas), released a statement criticizing the move, saying it will “deprive taxpayers of the compensation to which they are legally entitled under the ongoing conservatorships of Fannie Mae and Freddie Mac.”

“I’m very disappointed at FHFA and Treasury’s decision to roll back these vital taxpayer protections,” Hensarling’s statement read. “There is simply no good reason, policy or otherwise, why we should be putting the GSEs’ balance sheets ahead of the interest of taxpayers. In fact, the Congressional Budget Office evaluated this issue last year and said that such a change not only converts a potential draw on federal funds into an immediate draw, but increases ‘the explicit federal backstop for the GSEs — and thus the risk to taxpayers.’ Taxpayers remain explicitly on the hook for more than $250 billion of future GSE loses, and literally trillions more in implicit GSE backing. Americans deserve better, and we need to reform our broken financing system now, not tomorrow, not next Congress, not next crisis. Now.”