Fannie Mae CEO Reportedly Reprimanded for Romantic Conflict of Interest

Aug 13, 2018

Fannie Mae’s outgoing CEO has reportedly received a second reprimand for potential conflicts of interest connected to his relationship with a credit ratings agency executive.

According to a Politico report citing unidentified sources, Timothy Mayopoulos recused himself from Fannie Mae business with TransUnion, where Politico claimed “his romantic partner, Heather Russell, serves as Chief Legal Officer.” The Inspector General for the Federal Housing Finance Agency (FHFA), Fannie Mae’s regulator, issued a report citing the Mayopoulous-Russell relationship, but their names and TransUnion were redacted from the report’s public version—Politico stated it “has independently confirmed the report’s contents.”

Mayopoulos announced his resignation from Fannie Mae on July 23, three days before the report was released. The same day, FHFA Director Mel Watt dropped a credit-scoring project between Fannie Mae and TransUnion.

Mayopoulos' relationship with Russell was the subject of a March 2017 report when Russell was Chief Counsel for mortgage lender Fifth Third, which conducted business with Fannie Mae. In that report, the Inspector General recommended “disciplinary action against Mr. Mayopoulos up to and including his removal as CEO for repeated breaches of duty to Fannie Mae.” Mayopoulos kept his job, while Fifth Third fired Russell in July 2016 after she disclosed the relationship to the bank.

Fannie Mae pushed back at the Politico report.

“Any suggestion that the timing of Tim's decision was driven by anything other than his own personal and professional goals is entirely incorrect,” Fannie Mae Chairman Egbert Perry said in a written statement. “We wish he would stay longer, but we respect his decision.”

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Aug 13, 2018

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