Mortgage giant Fannie Mae is on the hunt for a new CEO, and has also named Wells Fargo veteran Michael Heid to chair the company’s board to fill a vacancy created by the imminent departure of former FDIC Chair Sheila Bair.
The changes are routine — outgoing CEO Hugh Frater is retiring, and Bair is rumored to be in the running for a top spot at the Federal Reserve — but represent a changing of the guard at Fannie Mae.
Bair, who chaired the Federal Deposit Insurance Corp. (FDIC) during the 2007-2009 mortgage meltdown, joined Fannie Mae’s board in 2019. She announced Friday she’ll be stepping down on May 1, citing time constraints.
“I’ve been privileged to serve this institution and its dedicated employees as we have remained relentlessly focused on the needs of homeowners and renters through a pandemic, tumultuous market conditions, and a transition in administrations,” Bair said in a statement. “Unfortunately, I have found it difficult to meet the substantial time demands of this position while fulfilling my other board and advisory responsibilities.”
In addition to Fannie Mae, Bair serves on the boards of Paxos, Lion Electric and Bunge, and is an advisor to Wealthfront and Grupo Santander, according to her LinkedIn profile.
Heid, a longtime executive at Wells Fargo Home Mortgage before retiring in 2016, has been elected by Fannie Mae’s board to succeed Bair. A member of Fannie Mae’s board since 2016, Heid also serves on the board of Roosevelt Management Company and the advisory board for Home Partners of America and Promontory MortgagePath.
Fannie Mae President David C. Benson, a 20-year veteran of the company, will serve as interim CEO and board member, subject to final approval by the Federal Housing Finance Agency. Benson, 62, has served as Fannie Mae’s president since 2018, and also served as the company’s interim chief financial officer from May 2021 to November 2021.
“When I became CEO in 2019, I committed to the board I would remain for three years, and it has been the privilege of a lifetime to lead this organization,” Frater said in a statement. “Given the strides we have made on so many fronts, this is the right time to transition to a new CEO. Dave knows this company better than anyone else and will provide outstanding leadership, together with our new Board Chair Mike Heid, as the entire enterprise works together to build a more sustainable housing finance market that better serves people across America.”
Fannie Mae’s board of directors announced it will conduct a national search for a permanent CEO.
It will also be looking to fill another opening on Fannie Mae’s board, to fill a seat being vacated May 1 by Antony Jenkins. A former Barclays CEO and the founder and executive chair of 10xFuture Technologies, Jenkins joined the board in July 2018. Jenkins also cited time constraints in submitting his resignation.
According to Politico, Baird is one of several names being discussed by Washington D.C. insiders as a potential nominee to become the next vice chair for supervision at the Federal Reserve. The Biden administration’s first nominee to fill the position — Sarah Bloom Raskin, a former Fed governor and deputy Treasury secretary — had to withdraw in March in the face of “fierce resistance” from the oil and gas industry, Politico reported at the time.
Republicans on the Senate Banking Committee blocked a vote on Raskin, who has said the Fed could do more to combat climate change. Raskin withdrew herself from consideration after West Virginia Democrat Sen. Joe Manchin and moderate Republicans Susan Collins and Lisa Murkowski said they would not support her.
Bair is a “Republican ally of Elizabeth Warren,” Politico noted Monday, which could help her win bipartisan support. Even as Fannie Mae’s chair, Bair kept her hand in politics, last month urging the Biden administration to appoint Republicans or independents to fill two open seats on the FDIC’s board, American Banker reported.
At the Fed, the vice chair for supervision oversees the central bank’s regulation and supervision efforts. Although the position was created in 2010 by the Dodd-Frank Act, it remained vacant until the Trump administration appointed Randal Quarles to a four-year term that expired on Oct. 13.
“And so, the vice chair for supervision — that unique creature of governance created by Congress just a decade ago — remains vacant, creating the possibility that financial regulation and supervision will not take their place at the forefront of the Fed’s policymaking,” legal scholar Peter Conti-Brown wrote for the Brookings Institution last fall. By allowing Quarles’ term to expire without nominating a successor, the Biden administration effectively granted “more authority to the Fed’s staff to handle this highly political and politicized portfolio.”