Bunning Introduces Legislation To Prevent Fannie And Freddie Executives From Being Rewarded For Failure

U.S. Senator Jim Bunning today introduced S. 3458, a bill to prohibit the former executives and directors of Fannie Mae and Freddie Mac from receiving severance pay after they were removed from their positions when the federal government took control of the two financial institutions this weekend.

The bill introduced by Bunning today would amend the recently-enacted legislation that gave the Treasury Department the authority to extend a lifeline to Fannie Mae and Freddie Mac (the Housing and Economic Recovery Act of 2008) to prohibit any golden parachute severance packages for the recently terminated executives. Under current law the federal regulator has the power to prohibit these kinds of pay-outs, but can decide on a case by case basis whether or not to use that power. Bunning’s legislation would specifically require the regulator to use those powers and stop the former executives and directors of Fannie Mae and Freddie Mac from receiving any such severance package.

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