Members of Congress criticized the decision to allow the CEOs of the bailed-out companies Fannie Mae and Freddie Mac to receive salaries of $4 million annually, suggesting that it represented that the businesses were returning to the old business model that led to their collapse and taxpayer bailout.
"This decision by the Federal Housing Finance Agency to dramatically boost the salaries for the CEOs of Fannie and Freddie would appear to signal a return to business as usual," said Sen. Mark Warner, D-Va., in a statement on the agency's decision announced Wednesday to allow the two CEOs to get raises from the $600,000 annual salaries they had been earning earlier.
Warner is one of the original Senate authors of legislation to shut down the two companies and replace them with a new housing finance system in which private investors would be first in line for losses on mortgage-backed securities. That legislation cleared the Banking Committee, but failed to go further in the chamber.
Lack of congressional action has left major decisions about the two government-sponsored enterprises up to their government caretaker, Federal Housing Finance Agency Director Mel Watt.