Former CEO of Fannie Mae to lead Silicon Valley bridge bank

Federal Deposit Insurance Corp. has named former Fannie Mae CEO Tim Mayopoulos as the FDIC-created “bridge banking” of Silicon Valley Bank. This was in response to Friday’s bank failure. The FDIC transferred all deposits to Silicon Valley Bank N.A., to protect the depositors. The former official was most recently president of Blend Labs, a mortgage fintech company. He was in that position since 2019, but he planned to retire during the first quarter. A representative for Blend Monday confirmed that Mayopoulos had already resigned, but remained on company’s board. Blend also confirmed that it does not have any connection or exposure to Signature Bank nor SVB. Signature Bank was also shut down this weekend by regulators. Mayopoulos was previously general counsel at Bank of America. He joined Fannie Mae shortly after the Great Recession in 2012, just a few years before the government-sponsored company was placed into conservatorship due to losses. Mayopoulos had been general counsel at Bank of America before joining Fannie Mae in 2012, just a few years after the government-sponsored enterprise was forced into conservatorship by losses. Common Securitization Solutions was established by Mayopoulos and Freddie Mac with the goal of adjusting for differences between the trading of their mortgage bonds to the disadvantage of the former. He also managed the wider application of credit risk sharing vehicles with the private sector, though Freddie was the one who had initiated the risk-sharing arrangements. Mayopoulos indicated that he would not be involved in business decisions involving her company. However, a watchdog agency published a redacted report highlighting the fact that he had been part of discussions about Fannie’s and Freddies credit scores. This could have been beneficial for the company. The combination of Mayopoulos’ experience with a technology startup and his previous experience as a manager of a government-sponsored enterprise that backed the type of mortgage bonds SVB invested into should make it easier to oversee the FDIC-created bank. Blend announced that it would be reducing its staff by 28% to address “market realities” such as declining mortgage originations and rising interest rates. Blend reported a loss of $132.7 million in the third quarter. The fourth quarter earnings call will be held March 16.Silicon Valley Bank N.A. The FDIC stated that SVB’s normal banking hours were resumed Monday morning. The bridge bank will continue to be in place until the regulator can stabilize and implement a resolution. Greg Carmichael, former CEO of Fifth Third Bancorp, was also appointed by regulators to head the bridge bank for Signature Bank.