Fannie Mae-No Politics (FNMA)

[Sogo]

Bingo. Fiduciary duty is to conservator, not treasury. I hadn't thought of that in the way you suggest. But it makes perfect sense. The executives' fiduciary duty normally is on behalf of shareholders. But the conservator has taken the place of shareholders, ok. Well then the fiduciary duty is on behalf of the conservator, NOT the treasury. This means that since paying 100% of profits to the treasury is clearly not in the interest of conserving the GSEs (duh), the executives should be acting in the interest of the conservator, and should protest and sue treasury (basically do anything they can to not pay that sweep money). The executives actually have a legally binding duty to fight tooth and nail to protect the interest of the conservator, which means not paying the sweep and bringing suit against treasury. The execs are clearly not fulfilling their fiduciary duty. They are doing the opposite. Suing treasury would force them to defend a clearly unconstitutional sweep. Of course politics is stopping the execs from bringing suit. But when seen through the lens of what executives are legally bound to do, this action of suing the treasury is not just a no brainer, it's actually required by law that the execs try everything, every idea under the sun, in order to protect the interests of the conservator.