Fannie Mae Agrees To New OversightProvisions
WASHINGTON - (03/09/05) -- Fannie Mae and its federalregulator, the Office of Federal Housing Enterprise Oversight,announced a new supervisory agreement for the secondary mortgagemarket giant Tuesday that will require the company to split itschairman and CEO positions. The agreement also calls for Fannie Maeto set up new policies to address faulty accounting and create anew ombudsman's office to hear complaints from company employees.The new Office of Compliance and Ethics will review internalcomplaints and the company's general counsel will report suspectedmisconduct directly to the board. The steps come on top of recentsupervisory requirements to boost capital by 30% and as theaccounting scandal surrounding the company continues. Among otherthings, OFHEO found last year that Fannie Mae had misrepresentedits financial statements to qualify dozens of employees for higherannual bonuses. The disclosures resulted in the dismissal of FannieMae's longtime chairman and CEO Franklin Raines, and the company'schief financial officer, Timothy Howard.