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THE LATEST SECONDARY MARKET Senate Bill on Insider Trading Includes GSE H ouse lawmakers passed legislation recently that prohibits insider trading among their members, amending the bill to ban controversial multimillion- dollar bonuses for senior-level executives with Fannie Mae and Freddie Mac. The lower chamber cleared the Stop Trading on Congressional Knowledge Act (STOCK) by a vote of 417 to 2. An amendment to the leg- islation bars executives from receiving bonuses while Fannie Mae and Freddie Mac remain in federal conservatorship. This is the second insider-trad- ing bill from Congress to prohibit bonus pay for GSE executives. Sens. John McCain (R-Arizona) and Jay Rockefeller (D-West Virginia) amended a Senate version of the STOCK Act that likewise banned bonuses for senior-level staff with either Fannie Mae or Freddie Mac. Senators Continue to Speak Out Against CFPB Structure Reacting to the Obama administration's moves to solidify the leadership of the CFPB, lawmakers fight the organization. Bonus Limitations Politics prevail as lawmakers tack on an amendment limiting GSE bonus payments to a separate piece of legislation. Last year, 10 executives with the GSEs received $13 million in bo- nuses, stirring lawmakers to action and prompting numerous calls from Congress to prohibit excessive pay. Fannie Mae CEO Michael Williams and Freddie Mac CEO Charles "Ed" Haldeman announced their resignations shortly thereafter, although neither authorities nor the media made any connection to the controversy over bonuses. The STOCK Act also requires mortgage disclosures from high-ranking government officials and their spouses. The inclusion is a reference to recent congressional and federal investigations into Countrywide Financial Corp. loans and special privileges for lawmakers. If reconciled with the Senate version, the STOCK Act will either move to both chambers of Congress for a full vote or enter conference, where representatives and senators from either party will work out the differences. T hirty-nine Senate Republicans vowed to challenge several recent recess appointments, including one that installed Richard Cordray as Consumer Financial Protection Bureau (CFPB) director, by turning to the courts. An open letter signaled that the lawmakers will also contest appointments to the National Labor Relations Board. "American democracy was born out of a rejection of the monarchies of Western Europe, anchored by limited government and separation of powers," Sen. John Cornyn (R-Texas) said in a statement. "We refuse to stand by as this president arrogantly casts aside our Constitution and defies the will of the American people under the election-year guise of defending them." Republican lawmakers who did not sign the pledge include Sens. Scott Brown (R-Massachusetts), Thad Chochran (R-Mississippi), Dean Heller (R-Nevada), Mark Kirk (R-Illinois), Jeff Sessions (R-Alabama), Richard Shelby (R-Alabama), Olympia Snowe (R-Maine), and Roger Wicker (R-Mississippi). None indicated whether the senators would join any suits filed earlier in the year, including one by the National Federation of Independent Business or another by the National Right to Work Legal Defense Foundation. Many of the signers released another open letter recently with questions for Senate Majority Leader Harry Reid (D-Nevada) over his past role as a supporter of pro-forma sessions as a tactic to block recess appointments. Sen. Saxby Chambliss (R-Georgia), who also signed the pledge for legal redress, said in a statement that an "apparent shift" in Reid's opinion "raises a num- ber of concerns. Most specifical- ly, it appears that you believe the importance of preserving [the] Senate's constitutional role in the nomination and appointment process varies depending on the political party of the president." For his part, President Barack Obama continues to trumpet his recess appointments, spotlighting Cordray more recently in both his State of the Union address and in speeches he makes as he barnstorms across the country in an election year. The Justice Department released a legal opinion in January that sided with the Obama administration and argued against the validity of a pro- forma session as a way to keep the Senate out of recess. THE M REPORT | 71 ORIGINATION SERVICING ANALYTICS SECONDARY MARKET