SEC. 2. CONGRESSIONAL FINDINGS. 
The Congress finds that— 
(1) the Federal National Mortgage Association 
(known as Fannie Mae) and the Federal Home Loan 
Mortgage Corporation (known as Freddie Mac), 
which are both privately owned but publicly char-
tered government-sponsored enterprises (GSEs), 
were at the center of the mortgage market meltdown 
that caused the financial crisis that commenced in 
2008; 
(2) the failures of Fannie Mae and Freddie 
Mac helped precipitate the deepest economic decline 
since World War II and the loss of 7,500,000 jobs; 
(3) in September 2008, the Treasury Depart-
ment, Federal Reserve Board, and Federal Housing 
Finance Agency (FHFA) exercised authority grant-
ed by the Congress to place the two GSEs in con-
servatorship, a form of nationalization that puts the 
regulators firmly in control of the GSEs’ daily oper-
ations; 
(4) in September 2008, the Administration es-
tablished a $200 billion facility to purchase senior 
preferred stock in the enterprises to backstop their 
losses; 
VerDate Nov 24 2008 
06:31 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H4476.IH
H4476
tjames on DSKG8SOYB1PROD with BILLS
(5) in February 2009, the Obama Administra-
tion raised the senior preferred stock purchase com-
mitment to $400 billion; 
(6) on Christmas Eve 2009, the Obama Admin-
istration removed any limits on the use of Federal 
funds to cover losses at the enterprises, significantly 
expanding a commitment that has already resulted 
in the expenditure of more than $110 billion in tax-
payer funds to purchase senior preferred stock in 
the two enterprises; 
(7) as a result of the Government’s actions, the 
taxpayers of the United States now own at least 80 
percent of the two GSEs; 
(8) the Administration is using Fannie Mae and 
Freddie Mac as instruments of Federal housing pol-
icy, making it less likely that they will ever be re-
turned to private ownership; 
(9) the Congressional Budget Office has con-
cluded that Fannie Mae and Freddie Mac have ef-
fectively become government entities whose oper-
ations should be included in the Federal budget; 
(10) the GSEs are expected to be a long-term 
drain on the taxpayers as a result of market condi-
tions and the political and public policy mandates 
VerDate Nov 24 2008 
06:31 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H4476.IH
H4476
tjames on DSKG8SOYB1PROD with BILLS
imposed on them by the Administration and the 
Congress; 
(11) in spite of these liabilities, at the end of 
2009, the Treasury Department and the FHFA ap-
proved compensation packages for 2010 for the chief 
executive officers of Fannie Mae and Freddie Mac of 
$6,000,000 
each, 
including 
incentive 
pay 
of 
$2,000,000 each, which is 15 times more than the 
annual compensation of the President and 30 times 
more than the annual compensation of a Cabinet 
Secretary; 
(12) the Treasury Department and the FHFA 
also approved multi-million dollar compensation 
packages for a number of the GSEs’ top executives, 
payable in cash rather than in the type of stock op-
tions that have characterized compensation arrange-
ments at other large financial institutions that have 
received extraordinary government assistance; 
(13) on September 17, 2008, FHFA deter-
mined that no executive officer of Fannie Mae or 
Freddie Mac would be entitled to receive a cash 
bonus or long-term incentive awards for 2008; 
(14) FHFA’s five-year Strategic Plan for 
Fannie Mae and Freddie Mac includes a commit-
VerDate Nov 24 2008 
06:31 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H4476.IH
H4476
tjames on DSKG8SOYB1PROD with BILLS
ment that the GSEs will operate in a safe and sound 
manner; and 
(15) section 1318(c) of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 
1992 (12 U.S.C. 4518(c), as added by section 
1113(a)(4) of the Housing and Economic Recovery 
Act of 2008 (Public Law 110–289; 122 Stat. 
2678)), permits the Director of FHFA to ‘‘withhold 
any payment, transfer, or disbursement of com-
pensation to an executive officer, or to place such 
compensation in an escrow account, during the re-
view of the reasonableness and comparability of com-
pensation’’. 
SEC. 3. REASONABLE COMPENSATION. 
(a) SUSPENSION
OF
CURRENT
COMPENSATION 
PACKAGES.—The Director of the Federal Housing Fi-
nance Agency shall immediately upon the enactment of 
this Act suspend the compensation packages approved for 
2010 for the executive officers (as such term is defined 
in section 1303 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 U.S.C. 
4502)) of the Federal National Mortgage Association and 
the Federal Home Loan Mortgage Corporation and, in lieu 
of such packages, establish a compensation system for the 
executive officers of such enterprises in accordance with 
VerDate Nov 24 2008 
06:31 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H4476.IH
H4476
tjames on DSKG8SOYB1PROD with BILLS
the rates of pay for positions in the Executive Schedule 
and the Senior Executive Service of the Federal Govern-
ment. 
(b) CLAWBACK OF 2009 COMPENSATION.— 
(1) SENSE OF THE CONGRESS.—It is the sense 
of the Congress that each executive officer (as such 
term is defined in section 1303 of the Federal Hous-
ing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4502)) of the Federal National 
Mortgage Association and the Federal Home Loan 
Mortgage Corporation should return to the Sec-
retary of the Treasury any compensation earned in 
2009 that was in excess of the maximum annual 
rate of basic pay authorized for a position in level 
I of the Executive Schedule. 
(2) USE
TO
REDUCE
NATIONAL
DEBT.—The 
Secretary of the Treasury shall transfer any 
amounts referred to in paragraph (1) that are re-
turned to the Secretary to the special account estab-
lished by section 3113(d) of title 31, United States 
Code (relating to reducing the public debt). 
Æ 
VerDate Nov 24 2008 
06:31 Jan 21, 2010
Jkt 089200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6301
E:\BILLS\H4476.IH
H4476
tjames on DSKG8SOYB1PROD with BILLS