On January 22, Chairman Barney Frank (D-Mass.) of the House Financial Services Committee called for abolishing Fannie Mae and Freddie Mac.
Representative Frank added that his committee would examine the future of both companies within the broader context of coming up with a whole new system for the nation’s housing finance. For months, the Obama administration said it expected to announce in early February a new course for the twin behemoths, which were effectively nationalized in 2008. As this went to press, neither a broad outline nor detailed reforms were released.
Meanwhile, House Financial Services Committee member Spencer Bachus (R-Ala.) introduced a bill to reduce annual compensation for the two companies’ senior management to the level of federal employees with similar duties. The bill counters the Federal Housing Finance Agency’s recent approval of compensation that would allow Fannie and Freddie’s CEOs to be paid up to $6 million.