House Financial Services Committee Overwhelmingly Approves GSE Salary Cap Bill – NMP 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
MISMO Seeks Public Comment On 3 eMortgage Resources

Updates proposed to MISMO Business Glossary, eMortgage Glossary, and eModification Reference Flyer.

Regulation and Compliance
Aug 05, 2022
As Expected, The Fed Raises Rate By Another 0.75%

Experts say housing industry will shrug off the latest increase.

Regulation and Compliance
Jul 27, 2022
AmTrust Ends 'No-Poach' Agreement, Pays $1.25M Fine In Deal With N.Y. AG

Company also agrees to cooperate with ongoing investigations of the title insurance industry.

Regulation and Compliance
Jul 25, 2022
NAR Chief Economist: Nationwide Home Price Decline Won't Happen Soon

Lack of inventory continues to support growth in prices, which have increased year over year for 124 straight months.

Regulation and Compliance
Jul 22, 2022
FHFA Director: Fannie, Freddie Need $300B Combined In Capital

So far, the enterprises combined have built $83.5 billion in reserves, or about 27% of the target.

Regulation and Compliance
Jul 21, 2022
Expansion Of Community Reinvestment Act A Poor Fit For A Non-Problem

Equating non-bank mortgage companies to banks is misguided for several reasons.

Analysis and Data
Jul 20, 2022