WASHINGTON (Legal Newsline) -- The U.S. Senate has approved an amendment to end bonuses and to limit the pay of Fannie Mae and Freddie Mac executives.
The two failed mortgage companies, known as Government Sponsored Enterprises, were bailed out by taxpayers in 2008. They have subsequently received more than $170 billion of taxpayer funds.
The vote came Feb. 2, based on proposed legislation first by Financial Services Committee Chairman, Rep. Spencer Bachus (R.Ala.)
"The taxpayer-funded bailout of Fannie and Freddie is the biggest bailout in history," Bachus said. "Forcing taxpayers to pay these executives multi-million dollar salaries and bonuses just adds insult to injury.
"The action taken by the Senate moves us closer to stopping this outrage."
Fannie Mae's CEO received $5.6 million in compensation last year and Freddie Mac's CEO received $5.4 million. They also received $12.79 million in bonus pay that was awarded by the Federal Housing Finance Agency to the top 10 executives of the two companies.
The amendment, sponsored by Sens. Jay Rockefeller, (D-W.Va.) and John McCain, (R-Ariz.), prevents the executives from receiving multi-million dollar bonuses while the entities remain in conservatorship.
"Today's vote in the Senate to stop high-paid executives at Fannie Mae and Freddie Mac from receiving huge multi-million dollar bonuses is a good first step in finally confronting the challenge we face with these 'government-sponsored enterprises' (GSEs), which played a large role in causing the housing crisis in this country," McCain said. "Since they were placed in conservatorship in 2008, Fannie and Freddie have taken the American taxpayer for nearly $170 billion in bailouts and recently requested $13.8 billion more.
"The American taxpayer has been the victim of outright corruption and blatant abuse at the hands of Fannie Mae and Freddie Mac for decades - it must stop. It is time to enact fundamental GSE reform, and take Fannie and Freddie off the permanent taxpayer bailout list, returning them to the competitive marketplace before they go from 'too big to fail' to 'too late to fix.' The American people deserve no less."