(CBS/AP) WASHINGTON — Donald Layton, the former chief executive of brokerage firm E-Trade Financial Corp. (ETFC), will be the next CEO of Freddie Mac.
The government-controlled mortgage company says Layton will take over the top job on May 21. He will succeed Charles E. Haldeman Jr., who announced last fall that he would resign as CEO this year.
Layton, 62, spent 30 years working at JPMorgan Chase & Co. (JPM) and its predecessor companies. He also was a senior adviser to the Securities Industry and Financial Markets Association, Wall Street's biggest lobbying group.
Layton currently serves as an independent director with American International Group Inc. AIG announced Thursday that due to his appointment as CEO of Freddie Mac, Layton had submitted his resignation from the AIG Board of Directors to be effective as of May 16.
The government rescued Freddie Mac and sibling company Fannie Mae in September 2008 to cover losses on soured mortgage loans. Taxpayers have so far spent about $170 million to rescue the companies, the largest bailouts of the financial crisis.
Freddie, based in McLean, Va., and Washington-based Fannie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. Along with several federal agencies, they backed nearly 90 percent of new mortgages over the past year.
Layton said Thursday that he views his new position "as a public service."
Freddie and Fannie play a key role in the economic recovery through their dominance in the housing market, and it's important for them to run well, he said in a telephone interview.
Pressure continues on the government to eliminate Fannie and Freddie and reduce taxpayers' exposure to risk. The Treasury Department put forward a plan last year to slowly dissolve the companies, though that process could take years. Abolishing Fannie and Freddie would transform how homes are bought and redefine who can afford them.
Layton acknowledged there will be "moderate if not significant changes" to the two companies.
"What attracts me is participating in that," he said. "It's an uncertain future but I think there'll be some future for them."
Fannie CEO Michael J. Williams also plans to step down this year.
Under a new government policy, Layton's salary and that of the new Fannie chief executive will be capped at $500,000 per year and annual bonuses will be eliminated for all employees. Those changes came after Congress pressured the government to stop big payouts at the bailed-out companies.