$228.2 billion. That’s how much Fannie Mae and Freddie Mac will have paid to the U.S. Treasury since 2008 when the companies were put into the conservatorship. They have long passed the point in which the original taxpayer loan was repaid; in fact, that was about $40 billion ago.

Fannie’s earnings report today notes that it pulled in $1.3 billion in profit for the fourth quarter of the year. Freddie’s report yesterday noted $200 million in profit for the same quarter. And when the payments are due to Treasury in March, Freddie will send another $900 million and Fannie will send $1.9 billion.

Clearly the companies are profitable, but Fannie CEO Tim Mayopoulos said during a press call this morning that because the company does not have a capital reserve, there is a risk that it may be forced to rely on taxpayers for another loan. According to reports, Mayopoulos said that the “possibility of needing to take a draw from Treasury increases over time.”

Of course, the reason there is no capital reserve is because the government is taking all of Fannie and Freddie’s profits!  This underscores the importance of ending the Third Amendment Sweep to protect to protect taxpayers.  The sweep illegally diverts the GSEs’ profits and prevents them from building capital reserves that would be used in bad times.  The sweep specifically violates HERA, which requires FHFA to restore Fannie and Freddie to a “safe and solvent condition.” 

Mark Calabria, a former top aide at the Senate Banking Committee, and Michael Krimminger, former general counsel to the FDIC, were both instrumental in the creation of HERA and authored a very smart white paper detailing HERA violations. We’ve blogged about it, and you can read the post here, but here’s a key excerpt:

“They understood Congress didn’t have to start from scratch when writing HERA. Lawmakers looked at bank conservatorships and receiverships under the Federal Deposit Insurance Act (FDIA) and made a conscious decision to replicate the provisions aimed at protecting stakeholders. Congress embraced the long-held understanding of conservatorships should be relatively short-term proceedings with the interests of stakeholders in mind.

“‘Foremost in the drafters’ minds was the importance of both continuing the Companies’ operations without disruption and maintaining market confidence in the fair treatment of the Companies’ stakeholders by the government,’ they wrote.”

It’s time to end the sweep.  It’s not just illegal, it’s threatening the taxpayers as well.