Vitter, Warren Pass Legislation to Cap Pay Raises for Fannie Mae and Freddie Mac
Washington, D.C. - U.S. Senators David Vitter (R-La.) and Elizabeth Warren (D-Mass.), members of the Senate Banking Committee, announced that last night the U.S. Senate passed their bipartisan legislation, S. 2036, which would cap pay raises for executives at Fannie Mae and Freddie Mac, authorized earlier this year by the Federal Housing Finance Agency (FHFA). The mortgage lenders cost the taxpayers $187.5 billion during the financial crisis.
"Giving massive taxpayer-funded pay raises to Fannie Mae and Freddie Mac isn't just out of touch - it's downright offensive. These two companies are wards of the state. They exist in the current form only because folks across the country paid to bail out the mortgage giants during the financial crisis. In fact, they'd still be on the hook if Fannie Mae and Freddie Mac incurred further losses," Vitter said.
"Congressman Royce's hard work in the House built momentum to pass this important bill, and with last night's vote, the Senate has unanimously agreed that capping these pay raises is the common-sense, responsible course of action."
"Taxpayers paid nearly $200 billion to bail out Fannie and Freddie, the enterprises remain in federal conservatorship, and the public is still on the hook if they falter again. Rather than approving massive pay raises for Fannie's and Freddie's CEOs, FHFA should be working to reduce costs for homeowners and those who hope to own homes," said Warren.
FHFA authorized new executive compensation plans for the position of Chief Executive Officer as high as $7.26 million a year. The Vitter-Warren legislation would suspend the $4 million per year compensation packages and limit their total compensation to the prior level of $600,000 a year each.
This legislation is nearly identical to a bill authored by Congressman Ed Royce (R-Calif.), H.R. 2243, which passed out of the House Committee on Financial Services in July on a nearly unanimous vote.
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