Feds To Fannie: Your Jobs Are Secure
Here's a memo posted on the Fannie Mae intranet Sunday. Staff writer David S. Hilzenrath transcribed it after it was read to him by a source.
To: Fannie Mae Officers, Employees, and Other Personnel
From: James B. Lockhart III
Fannie Mae Conservator
Subject: Conservatorship of Fannie Mae
Date: September 7, 2008
With the consent of Fannie Mae's Board of Directors, and under my authority as the Director of the Federal Housing Finance Agency (FHFA), I have appointed the FHFA as Conservator of Fannie Mae, effective immediately. This means that, for all practical purposes, the FHFA is now exercising all the authorities of the Board of Directors, executive management, and shareholders of the company.
As Conservator, I have appointed Herb Allison as the new Chief Executive Officer for Fannie Mae, also effective immediately. Mr. Allison will introduce himself to you very shortly, and provide additional details on what you can expect as the conservatorship moves forward.
The purpose of appointing the Conservator is to preserve and conserve Fannie Mae's assets and property, and put the company in a sound and solvent condition. The goals of the conservatorship are to help restore confidence in Fannie Mae, enhance its ability to fulfill its mission, and mitigate the systemic risk that has contributed directly to the instability in the current market.
Clearly, this is a very significant regulatory action, and I know many of you will be concerned about how it will affect you and your work at Fannie Mae. I hope the following information will allay those concerns.
First, your jobs are secure. There will be no change in your employment status with Fannie Mae as a result of the conservatorship. Your jobs, compensation, and benefits will continue without interruption.
And second, it is very important to us to do whatever we can to ensure that Fannie Mae's operations and activities also continue without interruption. To help Fannie Mae return to financial strength, the Conservator will delegate authorities to Fannie Mae's management to move forward with business operations. Your cooperation with Mr. Allison and the conservatorship team are critical to these efforts.
Some of you will be contacted directly by FHFA staff who will be at Fannie Mae to assist with the transition and answer any questions you may have. Rest assured that they are not there to do your jobs, but rather to facilitate the conservatorship, and ensure business is proceeding. Our
goal is the rapid remediation of financial and risk management weaknesses. Please let the FHFA staff know of any issues or concerns you may have, and please help them by providing any information they request. Of course, feel free also to direct questions through your existing reporting channels, and those individuals will forward your questions to their FHFA contact. We will get answers to you as quickly as possible.
FHFA shares with you the goal of returning Fannie Mae to a sound footing so that it may continue to provide stability and liquidity to the United States mortgage market. The strong expression of support made today by the Treasury Department testifies to the importance of that mission. We will need your help to succeed in returning Fannie Mae to financial strength.
Thank you in advance for assisting me as Conservator, and your new CEO, Herb Allison, in making this a reality.
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