Senate adds Fannie, Freddie bonus ban to STOCK Act
The Senate agreed to a resolution that would stop executive bonuses at Fannie Mae and Freddie Mac, attaching the measure to a larger congressional insider-trading bill.
The resolution, introduced by Sens. John McCain, R-Ariz., and Jay Rockefeller, D-W.Va., passed on a voice vote for inclusion in the Stop Trading on Congressional Knowledge Act, colloquially known as the STOCK Act.
Senators later passed the STOCK Act later Thursday on a 96-3 vote. The McCain-Rockefeller amendment would eliminate bonus pay as long as the government-sponsored enterprises remain in conservatorship.
"It's about time that the Senate passed this responsible legislation to make sure the mortgage giants can't give out excessive, million-dollar bonuses while they are being propped up by taxpayer money," Rockefeller said in a statement. "The American people deserve better, particularly as too many families are struggling just to get by."
Thursday's resolution adds to the already-seething mood in Washington over bonus pay at Fannie and Freddie. Two senators introduced a separate bill Wednesday that would put Fannie and Freddie employees on a federal salary scale of $275,000 maximum annually, while also taking away bonuses.
A similar House bill, H.R. 1221, passed the House Financial Services Committee on a 52-4 vote in November. Congress' lower chamber has yet to vote on the bill.
The top 10 executives at Fannie and Freddie earned a combined $13 million in performance bonuses in 2010, according to Securities and Exchange Commission filings. The Federal Housing Finance Agency, the GSEs' regulator, said it expects a "substantial decrease in CEO compensation" as it searches for new heads for Fannie and Freddie.
Senators also added a measure in the STOCK Act that would require disclosure of home mortgages by federal legislators, the president, the vice president and any Senate-approved appointees by the president. This comes as a House investigation revealed at least four House members received cheaper home loans from Countrywide in exchange for policy influence.
The legislation is also up for consideration in the House, but has not yet reached the floor for a vote.