WASHINGTON — The Federal Housing Finance Agency ousted the current leadership of Fannie Mae and Freddie Mac on Sunday, replacing them with two hand-picked successors.
Herbert M. Allison, the former chairman, president and chief executive officer of TIAA-CREF was tapped as CEO of Fannie, while David Moffett, the former vice chairman and chief financial officer of U.S. Bancorop. was chosen as Freddie's CEO.
Both bring extensive financial services knowledge to their new roles.
Mr. Allison, who was finance chairman of Sen. John McCain's presidential bid in 2000, joined TIAA-CREF in 2002 after 28 years at Merrill Lynch & Co. He first served as an associate in the investment bank until eventually rising to president and chief operating officer.
Mr. Allison is also a member of a panel selected by former New York Gov. Eliot Spitzer to examine ways to modernize the regulation of financial services, and is currently a director of Time Warner.
His tenure at Merrill Lynch was not without some controversy, however. Mr. Allison resigned from the firm in 1999 after he was denied the CEO job. According to a New York Times article at the time, he was criticized internally for moving too quickly in overhauling Merrill's business to become more Internet-oriented. He was also criticized for the weak performance of Merrill's mutual fund business and some expensive acquisitions the investment bank made abroad, the article said.
Mr. Moffett retired from U.S. Bancorp. in 2007 after serving as its CFO for 14 years. He has since joined the Caryle Group as a senior advisor focused on opportunities in the global financial services sector. He joined the board of directors of MBIA Inc. last year. He also serves on the boards of eBay Inc., The E.W. Scripps Co., and the Building Materials Holding Corp.
He has previously served as chairman of the CFO council at the Financial Services Roundtable, and as a financial services industry advisor for Standard & Poor's and Moody's investor services. He was ranked among the top three CFOs in the banking industry in Institutional Investor Magazine in 2005.
Prior to joining U.S. Bancorp., Mr. Moffett was a senior vice president and assistant treasurer in corporate Treasury at Bank of America Corp. He joined the bank after it merged with Security Pacific Corp. in 1992. He served as a senior vice president at the California bank.
Though the government said that Dan Mudd, Fannie's CEO, and Richard Syron, Freddie's chairman and CEO, will step aside, Treasury Secretary Henry Paulson took pains not to blame the GSEs' problems on the two executives.
"I attribute the need for today's action primarily to the inherent conflict and flawed business model embedded in the GSE structure, and to the ongoing housing correction," Mr. Paulson said. "GSE managements and their boards are responsible for neither."
Mr. Paulson said he was "particularly pleased" both Mr. Mudd and Mr. Syron agreed to stay on at the GSEs during a transitional period.