WASHINGTON, D.C. – November 17, 2015 – (RealEstateRama) — The U.S. House of Representatives passed legislation to cap the salaries of the CEOs of Fannie Mae and Freddie Mac modeled on H.R. 2243, the Equity in Government Compensation Act of 2015, as introduced by U.S. Representative Ed Royce (R-Calif.). The bill is the first major standalone legislation enacted that deals with the GSEs since they were placed into conservatorship should the President sign it into law as expected.
“While this is a victory for taxpayers, the real battle of winding down the GSEs and ending the government’s domination of the housing market remains,” said Rep. Royce. “My ultimate goal is still comprehensive housing finance reform that brings private capital into the system to eliminate the boom-and-bust cycle that wreaked havoc on the American economy. This task takes on all the more urgency as Fannie and Freddie slip into the red and invite new taxpayer bailouts.”
Rep. Royce introduced the Equity in Government Compensation Act of 2015 on May 8, 2015, and it passed out of the House Financial Services Committee by a 57-1 vote on July 29, 2015. U.S. Senator David Vitter (R-La.) authored the Senate version of the bill that passed the Senate by unanimous consent on September 15, 2015. Both Rep. Royce’s bill as amended and Sen. Vitter’s legislation suspend the recently announced $4 million a year compensation packages for the CEOs at Fannie Mae and Freddie Mac and limit their total compensation to the prior level of $600,000 a year each.
Earlier this year, Federal Housing Finance Agency (FHFA) Director Mel Wattauthorized the GSEs to propose new executive compensation plans for the position of CEO that may be as high as the 25th percentile of the market, or approximately $7.26 million a year. The GSEs shortly thereafter announced that their CEOs would receive $4 million a year compensation packages, a dramatic raise from their prior annual salaries of $600,000 at a cap set by former FHFA Director Edward DeMarco.
Saat Alety (202-225-4111)