Business

Freddie and Fannie cap lift draws anger

Lawmakers from both political parties yesterday blasted the Treasury Department’s Christmas Eve announcement that beleaguered mortgage giants Fannie Mae and Freddie Mac would have access to unlimited funds without requiring congressional approval, and called for an investigation into the matter.

Reps. Spencer Bachus (R-Ala.) and Scott Garrett (R-NJ) called on the House Financial Services Committee to hold a hearing, while Rep. Dennis Kucinich (D-Ohio) said that as chairman of the domestic policy subcommittee on the House Oversight and Government Reform Committee, he, too, would launch a probe.

Calling the Treasury Department’s decision “curiously timed,” Kucinich in a statement questioned whether the move amounted to “back-door TARP,” referring to the government’s Troubled Asset Relief Program.

“This relationship between Treasury and Fannie and Freddie bears inspection, particularly in the wake of reports that the mortgage giants’ chief executives will now receive $900,000 each in annual compensation, bonuses of up to $6 million each, and an additional $42 million in special compensation will be spread among a dozen other executives,” he added.

Bachus and Garrett called the Treasury’s timing of the announcement a “transparent attempt to hide the news from the American people” just before a major holiday.

The Treasury last Thursday announced that it was lifting the $400 billion cap on federal aid available to Fannie and Freddie, giving both companies access to unlimited amounts of cash. The Treasury stressed the move wasn’t a sign that both companies were on the verge of collapse, noting Fannie has gotten just $60 billion of $200 billion in earmarked rescue cash, while Freddie has received $51 billion of its $200 billion allotment.

That announcement came the same day the Federal Housing Finance Agency, Fannie’s and Freddie’s regulator, OK’d millions in compensation for top executives. Post staff