To establish the independent Fannie Mae and Freddie Mac Investigative Commission to investigate the actions of officers and directors at Fannie Mae and Freddie Mac responsible for making the decisions that led to the enterprises' financial instability and the subsequent Federal conservatorship of such enterprises, and any financial gain that accrued to such officers and directors.

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 tremendously 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 appearance of quarterly volatility 
        in earnings and to meet Wall Street expectations.
            (6) In December 2004, the Securities and Exchange 
        Commission found that Fannie Mae had violated 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 dividends, 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 compensation 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 policies and decisions that contributed 
        to and exacerbated our Nation's housing crisis and financial 
        collapse of these corporations.
            (11) According to the Office of Federal Housing 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 having 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 decisions have not been publicly 
        disclosed, despite the public protections and benefits their 
        enterprises receive.
            (14) There is a need to fully understand what went wrong in 
        the management of Fannie Mae and Freddie Mac and the misguided, 
        potentially fraudulent board policies and practices that 
        ultimately led to the Federal conservatorship of such 
        enterprises so that similar mistakes will not be repeated in 
        the future.

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 ``Commission''). 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' financial instability and the subsequent 
        Federal conservatorship of such enterprises.
            (2) Fannie Mae and Freddie Mac's involvement, if any, in 
        the creation and proliferation of the securitized mortgage 
        instrument, and how such instrument affected the solvency of 
        such enterprises.
            (3) The role of the boards of directors of Fannie Mae and 
        Freddie Mac in developing the accounting and financial risk 
        policies of such enterprises, particularly as they relate to 
        subprime mortgages and the international securitization of 
        mortgages.
            (4) The actions of each board member or members, executive 
        officer or officers, or the board member or members and 
        executive officer or officers responsible 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 making the decisions that may have 
        encouraged the proliferation of the subprime mortgage industry.
            (6) The decisions that contributed to the overvaluation 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 and members of their boards of 
        directors from 1990 to 2008.
            (8) The board members, if any, who financially benefitted 
        from their appointment to either board of directors and/or 
        through the decisions of such board.
            (9) The tracking of political contributions to Presidential 
        and congressional elections and campaign funds that served to 
        influence U.S. housing policy by board members, officers, and 
        employees.
            (10) The appropriate role of Fannie Mae and Freddie Mac in 
        the U.S. housing market nationwide and regionally.
            (11) Such other matters that the President or the Congress 
        may place before the Commission.
            (12) The Commission shall possess full subpoena power and 
        authority to hire necessary staff to conduct its affairs.

SEC. 5. MEMBERSHIP.

    (a) Number and Appointment.--The Commission shall be composed of 9 
members appointed by the President as follows:
            (1) One member who shall serve as the Chairperson, shall be 
        appointed with the advice of the Senate.
            (2) Eight members, not more than four of whom shall be 
        members of the same political party, to be appointed based on 
        recommendations from the Speaker and the minority leader of the 
        House of Representatives, and the majority leader and minority 
        leader of the Senate, who shall each submit the names of two 
        recommended candidates to the President.
    (b) Terms.--Each member shall be appointed for the life of the 
Commission.
    (c) Vacancies.--A vacancy on the Commission shall be filled in the 
manner in which the original appointment was made for the remainder of 
that term. If there is a vacancy in the Chair of the Commission, the 
remaining members of the Commission may choose from among the members 
an interim Chairperson to serve until a new Chairperson is appointed.

SEC. 6. COMPENSATION.

    Members of Congress.--Members of the Commission who are Members of 
Congress shall not receive additional pay, allowances, or benefits by 
reason of their service on the Commission, but, as permitted by law, 
may be reimbursed for travel, subsistence, and other necessary expenses 
incurred when performing duties of the Commission.

SEC. 7. COMMISSION HIRING ALLOWANCE.

    Such sums as are necessary shall be appropriated to conduct the 
activities of the Commission but shall be no less than $5 million 
annually. Recovery of any assets fraudulently accruing to members of 
the boards of directors shall be returned to the general Treasury to 
offset such expenditures.

Summary: Independent Fannie Mae and Freddie Mac Investigative Commission Act - Establishes the Independent Fannie Mae and Freddie Mac Investigative Commission to investigate and issue a final report on the period following the savings and loan crisis of the 1980s to the present.

Requires the Commission to investigate: (1) the policies, practices, and board decisions of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) from the 1990s through the present that led to their financial instability and subsequent federal conservatorship; (2) Fannie Mae and Freddie Mac's involvement, if any, in the creation and proliferation of the securitized mortgage instrument, and how such instrument affected their solvency; (3) the role of their boards of directors in developing their accounting and financial risk policies; (4) the actions of each board member or members, executive officer or officers, or the board member or members and executive officer or officers responsible for making the financial decisions to grow the enterprises' portfolios of subprime mortgage loans; and (5) the board member or members, executive officer or officers, or the board member or members and executive officer or officers responsible for making the decisions that may have encouraged the proliferation of the subprime mortgage industry.