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Wednesday, July 1, 2015
CORKER STATEMENT ON MASSIVE PAY RAISE FOR FANNIE, FREDDIE CEOS
FHFA Director Lifts Executive Compensation Cap, Raising CEO Compensation from $600,000 to $4,000,000
WASHINGTON – U.S. Senator Bob Corker (R-Tenn.), a member of the Senate Banking Committee, today released the following statement regarding a Federal Housing Finance Agency (FHFA) decision to raise the compensation for the chief executive officers of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.
“I understand that Fannie Mae and Freddie Mac want to offer competitive salary and bonus packages to attract and retain talent, but because it appears that FHFA is ready to unilaterally drive the GSEs back to the failed model of private gains and public losses, this decision is just one more reason Congress must act to reform our housing finance system,” said Corker.
Legislation first introduced by Corker and Senator Mark Warner (D-Va.) in June 2013, the Housing Finance Reform and Taxpayer Protection Act (S.1217), passed the Senate Banking Committee in May 2014 by a vote of 13 to 9.
During the 2008 financial crisis, Fannie Mae and Freddie Mac were taken into government conservatorship and given a $188 billion capital injection from taxpayers to stay afloat. As a result, the private market almost completely disappeared, and nearly every loan made in America today comes with a full government guarantee. Despite this unsustainable situation, there still has been no real reform to our housing finance system. In April, a FHFA stress test showed that Fannie Mae and Freddie Mac could require a $157 billion taxpayer bailout to keep them afloat during a future crisis.