The Federal Deposit Insurance Corp. has tapped former Fannie Mae CEO Tim Mayopoulos to lead the FDIC-created "bridge bank" of Silicon Valley Bank to protect its depositors, following the bank's failure Friday.
Mayopoulos was named by the FDIC Monday as
A representative for Blend Monday confirmed Mayopoulos had already vacated the position but remained on the company's board of directors. Blend also confirmed that it has no affiliation or exposure to SVB nor Signature Bank, which was
The FDIC did not immediately respond to questions regarding Mayopoulos' appointment and compensation.
Mayopoulos had served general counsel at Bank of America before joining Fannie Mae in the wake of the Great Recession in 2012, a few years after the government-sponsored enterprise was forced into conservatorship by related losses. He had to take a notable pay cut from over $2 million he'd made at the bank to join Fannie at a salary limited to $600,000 per year.
Mayopoulos oversaw Fannie as it and fellow GSE Freddie Mac made some transformative changes, including the establishment of Common Securitization Solutions, an entity the two jointly ran with the aim of adjusting for differences in the trading of their mortgage bonds to the latter's disadvantage. He also handled the broader application of vehicles for sharing credit risk with the private market, though Freddie had pioneered the risk-sharing arrangements involved.
During his more than nine years at Fannie Mae, Mayopoulos was known for encouraging innovations such as Day1 Certainty, an initiative in which mortgage companies that could digitally validate loan data could receive some relief from representations and warranties they had to otherwise provide.
Mayopoulos' moves were met with acclaim by his supporters but critics said some of his experiments did not undergo sufficient public scrutiny.
He also received some negative press for the handling of his romantic relationship with a credit reporting executive (whom
Experience overseeing one of the government-sponsored enterprises that backed the kind of mortgage bonds SVB invested in should prove useful in overseeing the FDIC-created bridge bank, particularly when combined with Mayopoulos' background with a technology startup.
His departure from Blend came at a time when the mortgage fintech announced a 28% reduction of its on-shore staff to address the "market realities" of declining mortgage originations amid rising interest rates. In the third quarter, Blend reported
Silicon Valley Bank, N.A. resumed SVB's normal banking hours and activities Monday morning, the FDIC said. The bridge bank will remain in place until the regulator can stabilize the depository and implement a resolution. Regulators Sunday also tapped former Fifth Third Bancorp CEO Greg Carmichael to lead the bridge bank for Signature Bank.