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Democrats urge Countrywide CEO to share wealth
WASHINGTON (Reuters) - Senior Democratic lawmakers on Friday urged Countrywide Financial Corp CEO Angelo Mozilo to donate to struggling subprime mortgage borrowers some of the money he gets under Bank of America Corp's plan to acquire Countrywide.
The $4 billion deal was welcomed by lawmakers to help avert a collapse of Countrywide, the biggest U.S. mortgage lender, which has been hit hard by the country's housing crisis.
According to regulatory filings and compensation experts, Mozilo could receive about $36.4 million if the lender he founded is bought by the Charlotte, North Carolina-based bank.
"Mr. Mozilo could display some goodwill by donating any severance pay he stands to receive to the nonprofit housing counselors trying to prevent foreclosures," said Sen. Charles Schumer, a New York Democrat who heads the Congress Joint Economic Committee.
"Hopefully, this deal will clean up the company's harmful business practices that victimized homeowners across the nation and fueled the subprime mess," Schumer said in a statement.
The chairman of the House Financial Services Committee also said Mozilo should surrender some of his wealth to help some of the millions of American homeowners now facing default.
"I am calling on Angelo Mozilo, who will be profiting from this transaction personally, to donate a substantial portion of the $150 million he has collected over the last several years to nonprofits and other institutions that are helping us deal with the problem he helped to create," said Frank, a Massachusetts Democrat.
Countrywide representatives did not immediately return a message seeking comment on the lawmakers' statements.
Mozilo ranks as one of the best-paid U.S. executives, receiving about $387 million from pay and stock option gains from 2002 to 2006, according to U.S. regulatory filings. He has been criticized for using a prearranged trading plan to cash in tens of millions of dollars worth of stock options during the U.S. housing market downturn.
The Bank of America deal, however, was not welcomed by all.
The Service Employees International Union, which has 1.9 million members, is calling for the sale to be blocked because it would threaten families and consumers with long-term risk.
"Permitting such concentration of risk would be like putting a sick patient, Bank of America, together in the same room with a highly contagious and terminally-ill patient, Countrywide, and expecting both of them to get better," the union said.
(Additional reporting by Emily Chasan, Tim McLaughlin and Martha Graybow in New York; Editing by Mark Porter and Braden Reddall)
