Senators Thom Tillis (R-NC) and Elizabeth Warren (D-MA) both members of the Senate Banking Committee with jurisdiction over Fannie Mae and Freddie Mac, recently introduced the Respect the Caps Act.
The bill comes after the Federal Housing Finance Agency (FHFA) Inspector General reported the FHFA has allowed compensation for executives at Fannie Mae and Freddie Mac to expand well beyond Congressionally-mandated limits for chief executive compensation at both institutions 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.
The Respect the Caps Act closes this loophole by amending the Federal Home Loan Mortgage Corporation Act and the Federal National Mortgage Association Charter Act to explicitly state that neither Fannie nor Freddie may transfer or delegate any duty or responsibility of the chief executive officer to any other position.
Respect the Caps Act also says the director of the FHFA may be removed should he or she approve compensation greater than the cap of $600,000 a year.
“Hardworking Americans shouldn’t see their taxpayer dollars used to give already highly-paid executives at Fannie and Freddie massive raises,” said Senator Tillis. “The Respect the Caps Act closes a loophole to ensure this doesn’t happen again. It’s a simple matter of principle and ensuring taxpayer dollars are used wisely.”
The bill comes after the Federal Housing Finance Agency (FHFA) Inspector General reported the FHFA has allowed compensation for executives at Fannie Mae and Freddie Mac to expand well beyond Congressionally-mandated limits for chief executive compensation at both institutions 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.
The Respect the Caps Act closes this loophole by amending the Federal Home Loan Mortgage Corporation Act and the Federal National Mortgage Association Charter Act to explicitly state that neither Fannie nor Freddie may transfer or delegate any duty or responsibility of the chief executive officer to any other position.
Respect the Caps Act also says the director of the FHFA may be removed should he or she approve compensation greater than the cap of $600,000 a year.
“Hardworking Americans shouldn’t see their taxpayer dollars used to give already highly-paid executives at Fannie and Freddie massive raises,” said Senator Tillis. “The Respect the Caps Act closes a loophole to ensure this doesn’t happen again. It’s a simple matter of principle and ensuring taxpayer dollars are used wisely.”
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