Skip to main content

House Financial Services Committee Overwhelmingly Approves GSE Salary Cap Bill

NationalMortgageProfessional.com
Jul 30, 2015
Congressional Pic/Credit: franckreporter

The House Financial Services Committee has voted 57-1 to advance HR 2243, the Equity in Government Compensation Act of 2015, to limit compensation packages for the chief executive officers of the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac.

“Multi-million dollar paydays for the CEOs of Fannie and Freddie represent a failed grasp of reality on the part of both the GSEs and their regulator,” said U.S. Rep. Ed Royce (R-CA), sponsor of HR 2243. “At a time when American families are still struggling, members of both parties clearly find it incomprehensible that the FHFA would authorize the taxpayer-backed GSEs to hand out $4 million compensation packages to their CEOs.”

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.

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.

The Equity in Government Compensation Act of 2015 was amended during the Committee markup yesterday per negotiations with Ranking Member Maxine Waters (D-Calif.). As amended, the bill suspends the $4 million a year compensation packages for the CEOs at Fannie Mae and Freddie Mac and limits their total compensation to the prior level of $600,000 a year each.

The House Financial Services Committee voted on similar legislation, HR 1221, the Equity in Government Compensation Act of 2011 on Nov. 15, 2011. HR 1221 passed the Committee on a bipartisan vote of 52-4, with now-FHFA Director and former Committee member Mel Watt voting against the legislation, and spurred former FHFA Director DeMarco to institute salary limits at the GSEs.

Published
Jul 30, 2015
CFPB Names 4 To Key Senior Positions

The appointees include two who helped create the bureau and two who served on the CFPB staff during the Obama administration.

Regulation and Compliance
Oct 14, 2021
FHFA Raises Enterprises' Multifamily Loan Purchase Caps

The Federal Housing Finance Agency (FHFA) said the 2022 multifamily loan purchase caps will be $78 billion for each Enterprise, for a combined total of $156 billion to support the multifamily market.

Regulation and Compliance
Oct 13, 2021
CFPB Hits AAG With Complaint For Deceptive Marketing Of Reverse Mortgages

The Consumer Financial Protection Bureau filed a complaint and proposed consent order, which alleges that American Advisors Group (AAG) used inflated and deceptive home estimates to attract reverse mortgage consumers.

Regulation and Compliance
Oct 12, 2021
Waterstone Mortgage Names VP Of Compliance

Waterstone Mortgage Corporation named Kris Barros as the company's vice president of compliance.

Community
Oct 08, 2021
Battling The ‘Giant Purple Snorklewacker’

The confirmation of Rohit Chopra as CFPB director has the mortgage industry anxious, but former MBA CEO David Stevens offers some advice: follow the rules.

Regulation and Compliance
Oct 08, 2021
The Compliance Contradiction

Staunch compliance stances often lead to contradictory actions.

Regulation and Compliance
Oct 06, 2021