The U.S. House passed legislation late Monday that would cap the pay of the CEOs of mortgage giants Fannie Mae and Freddie Mac which came under government control during the 2008 financial crisis.
In a bipartisan voice vote, House lawmakers agreed to suspend new annual target compensation of $4 million for Fannie Mae CEO Timothy Mayopoulos and Freddie Mac CEO Donald Layton, reported The Washington Post.
The Senate passed similar legislation in September, and once President Obama signs the measure into law, as is expected, the bill would return the cap on the their annual salaries to $600,000 each, the level which regulators had previously set.
"The House took up and passed the Senate version of the bill, and passed it tonight by voice vote, as no House member requested a roll call vote," said the office of Rep. Ed Royce, R-Calif., who first introduced the bill, reported Housing Wire. "Essentially, no member was willing to go on record with their opposition to the bill."
The voice vote is a procedure typically used on issues where lawmakers may not want their yea or nay votes recorded, or for uncontroversial bills, according to the Post.
In September 2008, at the height of the financial crisis, Fannie and Freddie were on the verge of failing due to high losses on risky mortgages but were saved from collapse with a $170 billion taxpayer bailout.
The $600,000 pay caps were initially set in 2012 after it was revealed that the CEOs of the two companies were awarded a total of $17 million in 2009 and 2010.
Earlier this year, the Federal Housing Finance Agency, which oversees Fannie and Freddie, approved salary increases - an annual base of $750,000 each, $2.1 million in deferred compensation and $1.2 million in deferred salary for both CEOs, not including bonuses, according to The Associated Press.
But the raises were met with a stern rebuke from Congress, even by Democrats who have long held favorable attitudes toward the companies.
"While this is a victory for taxpayers, the real battle of winding down the GSEs [government-sponsored enterprises] and ending the government's domination of the housing market remains," said Royce. "My ultimate goal is still comprehensive housing finance reform that brings private capital into the system to eliminate the boom-and-bust cycle that wreaked havoc on the American economy. This task takes on all the more urgency as Fannie and Freddie slip into the red and invite new taxpayer bailouts."
