WASHINGTON — Two members of the Senate Banking Committee have introduced bipartisan legislation to enforce the salary caps of the chief executives at the mortgage giants Fannie Mae and Freddie Mac.
Sens. Elizabeth Warren, D-Mass., and Thom Tillis, R-N.C., have introduced the Respect the Caps Act, which would explicitly bar Fannie and Freddie from transferring or delegating any duty or responsibility to the chief executive to any other position. It would also allow for the Federal Housing Finance Agency director's removal if it approves compensation greater than the cap of $600,000 a year. The cap was signed into law in 2015.
The legislation comes after the FHFA’s inspector general reported that the agency allowed CEO salaries at Fannie and Freddie to go beyond the limits imposed by Congress after the financial crisis “by separating the chief executive and president role at those agencies, transferring duties of the chief executive officer to the president, and raising the president’s salary by millions,” according to a press release from Warren’s office.
"Instead of enforcing the law, the FHFA has allowed executive compensation at Fannie to increase by $3.6 million and at Freddie, by $3.25 million," Warren said. "My new bill with Senator Tillis is designed to close the loophole used to more than triple CEO salaries and keep Fannie and Freddie in check.”
