By BiloxiFannie Mae and Freddie Mac retention bonuses are being paid out to the execs. In a letter, Rep. Frank is asking James Lockhart to rescind Fannie and Freddie bonuses. Click here to read letter. Lockhart is the Director (CEO) and Chairman of the Oversight Board of the Federal Housing Finance Agency, regulator of Fannie Mae and Freddie Mac.
Lockhart is no stranger to scrunity. Lockhart was in the hot seat by the then Oversight Committee Chairman Henry Waxman. In a letter by Waxman in September 10, 2008, click here, Waxman wrote Lockhart that he is concerned that former execs of Fannie and Freddie might received millions in severances and bonuses upon their departure:
I am writing about reports suggesting that the former chief executive officers of Freddie
Mac and Fannie Mae might receive millions of dollars in severance payments and other
compensation upon their departure from their respective companies.
Lockhart is no stranger to scrunity. Lockhart was in the hot seat by the then Oversight Committee Chairman Henry Waxman. In a letter by Waxman in September 10, 2008, click here, Waxman wrote Lockhart that he is concerned that former execs of Fannie and Freddie might received millions in severances and bonuses upon their departure:
I am writing about reports suggesting that the former chief executive officers of Freddie
Mac and Fannie Mae might receive millions of dollars in severance payments and other
compensation upon their departure from their respective companies.
Earlier this year, the Committee on Oversight and Government Reform held a hearing
and conducted an investigation about the compensation, severance, and retirement packages
granted to the CEOs of three corporations deeply involved in the mortgage crisis. Serious
questions were raised about the appropriateness of providing multi-million dollar departure
packages and other benefits to CEOs who had presided over multi-billion dollar losses.
and conducted an investigation about the compensation, severance, and retirement packages
granted to the CEOs of three corporations deeply involved in the mortgage crisis. Serious
questions were raised about the appropriateness of providing multi-million dollar departure
packages and other benefits to CEOs who had presided over multi-billion dollar losses.
These questions are magnified in the'case of the compensation of the former CEOs of
Freddie Mac and Fannie Mae. The collapse of these companies is inflicting broad economic pain across the nation and billions of taxpayer dollars are now at risk. It would seem difficult to
justify rewarding the former CEOs with lavish compensation packages at a time of so much
economic hardship.
Fannie and Freddie will be become another target of scrunity in the public eye as AIG has been the center of attention of anger by the public and lawmaker of AIG million dollar bonuses to execs.
As you recall, I posted on the blog on Saturday of an article in the NYTimes in 2003 where the Bush Administration sought to create an agency to oversee Fannie Mae and Freddie Mac. Under the plan, a new agency would be created within the Treasury Department to supervise Fannie Mae and Freddie Mac. A bill were in talks in the Senate to implement but was killed in the Senate committee twice.
But in July 24, 2008, then President Bush signed into law the Housing and Economic Recovery Act of 2008 which enabled expanded regulatory authority over Fannie Mae and Freddie Mac by the newly established Federal Housing Finance Agency [FHFA], and gave the U.S. Treasury the authority to advance funds for the purpose of stabilizing Fannie Mae or Freddie Mac.
And now the same collapse institutions who are key players in the mortgage industry are behaving the same way as AIG.
Fannie Mae’s chief executive, similar to AIG CEO said to Congress last week, said that the bonuses are essential to keeping talented employees at his company during tough times: “I am deeply concerned that eliminating our retention plan would jeopardize our ability to fulfill the mission the government has given us to address the housing crisis.”
Rep. Frank fights back. On Tuesday, Senate Financial Services Committee to consider a bill to prohibit bonus payments. Click here. Here is an excerpt:
The bill adds new compensation/bonus restrictions to the Emergency Economic Stabilization Act for financial institutions that receive or have received a capital investment by the Treasury Department under the Troubled Asset Relief Program or the Housing and Economic Recovery Act (which covers Fannie Mae, Freddie Mac and the Federal Home Loan Banks). While such a capital investment is outstanding, recipients will be prohibited from:
Freddie Mac and Fannie Mae. The collapse of these companies is inflicting broad economic pain across the nation and billions of taxpayer dollars are now at risk. It would seem difficult to
justify rewarding the former CEOs with lavish compensation packages at a time of so much
economic hardship.
Fannie and Freddie will be become another target of scrunity in the public eye as AIG has been the center of attention of anger by the public and lawmaker of AIG million dollar bonuses to execs.
As you recall, I posted on the blog on Saturday of an article in the NYTimes in 2003 where the Bush Administration sought to create an agency to oversee Fannie Mae and Freddie Mac. Under the plan, a new agency would be created within the Treasury Department to supervise Fannie Mae and Freddie Mac. A bill were in talks in the Senate to implement but was killed in the Senate committee twice.
But in July 24, 2008, then President Bush signed into law the Housing and Economic Recovery Act of 2008 which enabled expanded regulatory authority over Fannie Mae and Freddie Mac by the newly established Federal Housing Finance Agency [FHFA], and gave the U.S. Treasury the authority to advance funds for the purpose of stabilizing Fannie Mae or Freddie Mac.
And now the same collapse institutions who are key players in the mortgage industry are behaving the same way as AIG.
Fannie Mae’s chief executive, similar to AIG CEO said to Congress last week, said that the bonuses are essential to keeping talented employees at his company during tough times: “I am deeply concerned that eliminating our retention plan would jeopardize our ability to fulfill the mission the government has given us to address the housing crisis.”
Rep. Frank fights back. On Tuesday, Senate Financial Services Committee to consider a bill to prohibit bonus payments. Click here. Here is an excerpt:
The bill adds new compensation/bonus restrictions to the Emergency Economic Stabilization Act for financial institutions that receive or have received a capital investment by the Treasury Department under the Troubled Asset Relief Program or the Housing and Economic Recovery Act (which covers Fannie Mae, Freddie Mac and the Federal Home Loan Banks). While such a capital investment is outstanding, recipients will be prohibited from:
• Paying any bonus to any employee, regardless of when any agreement to pay a bonus was entered into;
• Paying any compensation that is “unreasonable or excessive,” as defined in standards set by the Treasury Secretary
• Paying or arranging to pay any retention payment, bonus, or other supplemental payment that is not directly based on performance-based standards set by the Treasury Secretary.
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