Washington, D.C. – Armando Falcon, Jr., Director of the Office of Federal Housing Enterprise Oversight (OFHEO), financial safety and soundness regulator of Fannie Mae and Freddie Mac (the Enterprises), has sent to the Federal Register one final and two proposed regulations under OFHEO's infrastructure project initiated in July 2000. The regulations are Executive Compensation, Corporate Governance and Flood Insurance. The infrastructure project seeks to codify and make transparent OFHEO's actions and processes in supervising the Enterprises.
OFHEO's regulatory project is comprised of four areas: OFHEO Organization, Enterprise Corporate Governance, Safety and Soundness Issues and Compliance Matters.
OFHEO has sent the following final rule to the Federal Register:
1. Executive Compensation. Effective 45 days after publication; this regulation proposed in December 2000 codifies much of the Office's current practice related to its ability to oversee compensation and termination benefits provided by the Enterprises to their executive officers. The final rule clarifies statutory requirements and provides specifics as to the timing and informational requirements of the law. OFHEO made several modifications to the rule in response to comments received.
OFHEO has sent the following proposed rules to the Federal Register:
2. Corporate Governance. A proposed rule with a 60-day comment period; this regulation addresses minimum standards for corporate behavior. The rule was previously proposed in April 2001 but was withdrawn to permit new presidential appointments to be made to the Boards of the Enterprises. Such appointments have been largely completed. Corporate governance is a specific category of risk and risk management evaluated by OFHEO through its examination process. The proposed standards are significantly similar to those required by Federal banking agencies for regulated depository institutions.
3. Flood Insurance. A proposed rule with a 30-day comment period; this proposed rule addresses OFHEO's responsibility in examining the Enterprises to ensure they have a program in place to comply with requirements of the National Flood Insurance Reform Act of 1994, administered by the Federal Emergency Management Agency (FEMA).
OFHEO currently examines the Enterprises in the areas of executive compensation, corporate governance and flood insurance practices.
Attachment:
Executive Compensation, Corporate Governance and Flood Insurance; Final Rule and Proposed Rules
Stefanie Johnson (202) 649-3030