New Legislation Seeks to Limit GSE Exec Salaries – NMP Skip to main content

New Legislation Seeks to Limit GSE Exec Salaries

Jul 24, 2015
Pending home sales ended 2016 on an upswing, according to new data from the National Association of Realtors (NAR)

U.S. Rep. Ed Royce (R-CA) has authored legislation, HR 2243: The Equity in Government Compensation Act of 2015, to limit salaries at the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. The House Financial Services Committee (HFSC) announced that it will markup HR 2243. Earlier this year, Federal Housing Finance Agency (FHFA) Director Mel Watt authorized 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. This month the GSEs announced that their CEOs would receive $4 million a year compensation packages, a dramatic raise from their current annual salaries of $600,000 at a cap set by former FHFA Director Edward DeMarco.

“Congress needs to put a stop to the planned multi-million dollar paydays at Fannie Mae and Freddie Mac," said Rep. Royce. "Holding compensation packages at taxpayer-backed organizations to responsible limits is in the interest of the public trust. I thank Chairman Hensarling for advancing this legislation and look forward to building the bipartisan backing it previously garnered.”

The U.S. Department of the Treasury recently stated it "does not support FHFA’s new approach to CEO compensation at Fannie Mae and Freddie Mac and urged the agency to reject any increase." White House Press Secretary Josh Earnest has also stated, "I think it is entirely legitimate for the executives at those institutions to be subject to compensation limits," when asked about the White House's view on executive raises at the GSEs.

Originally introduced on May 8, 2015, HR 2243 suspends the compensation packages for executives at Fannie Mae and Freddie Mac and limits salaries to the highest level paid at the Federal Housing Finance Agency (FHFA), which was estimated at $255,000 a year by the Congressional Budget Office in 2011. The bill also places non-executive GSE employees on the General Schedule (GS) pay scale, the highest rank being $132,122 per year.

The House Financial Services Committee voted on similar legislation, the Equity in Government Compensation Act of 2011, on January 17, 2012. The bill passed the committee on a bipartisan vote of 52-4, with current FHFA Director and former Committee member Mel Watt voting against the legislation.

About the author
Published
Jul 24, 2015
Vought To Face Congress Over CFPB Overhaul, Enforcement Pullback

Vought’s testimony also comes as a new poll suggests the CFPB retains broad support across party lines

Illinois Changes Property Tax Foreclosure Process To Return Surplus Equity

Borrowers can save remaining home equity after delinquent property taxes and fees are paid

CFPB Weighs Changes To TRID Timing And Mortgage Rescission Rules

The bureau is seeking feedback on whether federal disclosure requirements raise costs, delay closings or limit access to mortgage credit

CFPB Issues AI Underwriting Guidance On Adverse Action Notices

The agency says proprietary and machine-learning models do not relieve lenders of their fair lending and disclosure responsibilities

VantageScore Says 4.0 Model Could Unlock $1 Trillion In Mortgage Originations

New study says VantageScore 4.0 scores five million more creditworthy borrowers than FICO Score 10T, expanding lending opportunities as the industry prepares for the GSE credit score transition

MISMO Updates Mortgage Insurance Standards To Support FICO 10T, VantageScore 4.0

New implementation guide standardizes mortgage insurance data exchange, helping lenders, insurers and technology providers prepare systems for newer credit scoring models