Capito On GSE Executive Compensation Packages

Statement

Rep. Shelley Moore Capito, R-W.Va., the ranking Republican member of the House Financial Services Subcommittee on Housing and Community Opportunity, made the following opening statement at today's Financial Services Committee hearing focused on Government Sponsored Enterprise (GSE) executive compensation packages:

"I would like to thank the Chairman for holding this hearing this afternoon and thank our witnesses for joining us today. It is my sincere hope that this is the first in a series of hearings pertaining to the future of the Government Sponsored Enterprises.

"Like many of my constituents, I was shocked when the Treasury Department and the Federal Housing Finance Agency approved compensation packages for the Chief Executive Officers of Fannie Mae and Freddie Mac of $6 million each including $2 million incentive payments for each executive. These compensation levels, which are 30 times that of a Cabinet Secretary, were approved for two entities owned by the taxpayers, and that have borrowed over $100 billion from the Treasury.

"This is an insult to the hard working families in my district who are having to make difficult choices and tighten their belts to deal with the recent economic downturn. As long as Fannie Mae and Freddie Mac are being supported by the taxpayers, compensation of this magnitude should be suspended. Earlier this year, I joined Ranking Member Bachus in introducing legislation that will suspend these pay packages and replace them with a compensation system for such officers in accordance with the rates of pay for positions in the Executive Schedule and the Senior Executive Service of the federal government.

"These compensation packages are but one of many examples of why this Congress needs to tackle the difficult task of GSE reform this year. The status quo is unacceptable. We have a responsibility to the taxpayers to come up with a solution to this problem and to work together in a bi-partisan manner. The Chairman has indicated that he would like to tackle the future of mortgage finance and I applaud his desire. Unfortunately, the Administration has signaled that they do not intend to put forth serious reform proposals until next year. The mortgage markets need certainty so they can operate appropriately, and we should not kick this can any further down the curb.

"Again, I thank the chairman for holding this hearing. I look forward to hearing from our witnesses."

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