SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Independent Fannie 
Mae and Freddie Mac Investigative Commission Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) The United States has suffered tremen-
dously from the irresponsible and unchecked growth 
of the mortgage industry which proliferated under 
the policies of Fannie Mae and Freddie Mac. 
(2) The Federal conservatorship of Fannie Mae 
and Freddie Mac may cost the American people a 
minimum of $200,000,000,000, and potentially $2.4 
trillion, making it potentially the largest financial 
bailout in our Nation’s history. 
(3) The American people, forced to shoulder the 
financial burden of the bailout, deserve to know 
what went wrong and why. 
(4) Any executive officers and members of the 
boards of directors at Fannie Mae and Freddie Mac 
who may have exercised poor judgment or committed 
wrongdoing should be held accountable for such 
judgments and actions. 
(5) In June 2003, Freddie Mac disclosed that 
it had misstated its earnings by roughly $5 billion 
between the years 2000 and 2002 to smooth the ap-
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pearance of quarterly volatility in earnings and to 
meet Wall Street expectations. 
(6) In December 2004, the Securities and Ex-
change Commission found that Fannie Mae had vio-
lated accounting rules and needed to restate its 
earnings by recording a loss of up to $9 billion from 
2001 to 2004 based on board policies established 
prior to that period. 
(7) The shareholders of Fannie Mae and 
Freddie Mac and the employees and directors of the 
boards of these enterprises have enjoyed large divi-
dends, bonuses, salaries, and other compensation 
based on policies and practices that may have been 
misguided or fraudulent. 
(8) In 2007, former Freddie Mac Chairman 
and Chief Executive Richard Syron alone received 
nearly $18,300,000 in compensation, despite the fact 
that the enterprise’s stock lost half its value. 
(9) Last year, former Fannie Mae President 
and Chief Executive Daniel Mudd received com-
pensation valued at $11,600,000. 
(10) Previous investigations of Fannie Mae and 
Freddie Mac have focused on accounting fraud, but 
there have not been any investigations on the poli-
cies and decisions that contributed to and exacer-
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bated our Nation’s housing crisis and financial col-
lapse of these corporations. 
(11) According to the Office of Federal Hous-
ing Enterprise Oversight, regulation allowed Freddie 
Mac and Fannie Mae to overleverage and operate 
with just $83.2 billion of capital at the end of 2007, 
even though it supported $5.2 trillion of debt and 
guarantees. 
(12) Although the executive officers of Fannie 
Mae and Freddie Mac have come under scrutiny, 
their boards of directors have been held harmless 
throughout the Nation’s housing crisis, despite hav-
ing the authority to create, influence, and vote for 
the policies of such enterprises. 
(13) The involvement of the boards of directors 
in the policies of Fannie Mae and Freddie Mac has 
been shrouded in secrecy, as their policymaking deci-
sions have not been publicly disclosed, despite the 
public protections and benefits their enterprises re-
ceive. 
(14) There is a need to fully understand what 
went wrong in the management of Fannie Mae and 
Freddie Mac and the misguided, potentially fraudu-
lent board policies and practices that ultimately led 
to the Federal conservatorship of such enterprises so 
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that similar mistakes will not be repeated in the fu-
ture. 
SEC. 3. ESTABLISHMENT. 
There is established a commission to be known as the 
‘‘Independent Fannie Mae and Freddie Mac Investigative 
Commission’’ (in this Act referred to as the ‘‘Commis-
sion’’). The Commission shall function upon the legislation 
being signed by the President of the United States and 
will conduct its investigations for a period of two years, 
issuing a final report upon completion with necessary 
hearings and assembly of related records for the period 
following the savings and loan crisis of the 1980s to the 
present. 
SEC. 4. DUTIES OF THE COMMISSION. 
The Commission shall investigate, determine, and 
make recommendations with respect to the following: 
(1) The policies, practices, and board decisions 
of Fannie Mae and Freddie Mac from the 1990s 
through the present that led to the enterprises’ fi-
nancial instability and the subsequent Federal con-
servatorship of such enterprises. 
(2) Fannie Mae and Freddie Mac’s involve-
ment, if any, in the creation and proliferation of the 
securitized mortgage instrument, and how such in-
strument affected the solvency of such enterprises. 
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(3) The role of the boards of directors of 
Fannie Mae and Freddie Mac in developing the ac-
counting and financial risk policies of such enter-
prises, particularly as they relate to subprime mort-
gages and the international securitization of mort-
gages. 
(4) The actions of each board member or mem-
bers, executive officer or officers, or the board mem-
ber or members and executive officer or officers re-
sponsible for making the financial decisions to grow 
such enterprises’ portfolios of subprime mortgage 
loans. 
(5) The board member or members, executive 
officer or officers, or the board member or members 
and executive officer or officers responsible for mak-
ing the decisions that may have encouraged the pro-
liferation of the subprime mortgage industry. 
(6) The decisions that contributed to the over-
valuation of risky mortgage investments in the stock 
market and to the growth of the subprime mortgage 
industry. 
(7) The annual compensation, stock options, 
and other financial benefits that accrued to each of 
Fannie Mae and Freddie Mac’s executive officers 
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