Before starting at U.S. Bancorp at 2005, Hartnack was head of the community banking group at Union Bank of California.
According to Freddie Mac’s 8-K filing, obtained via DisclosureNet.com, between one-third and one-half of his personal net worth is tied up in an equity stake in U.S. Bancorp, plus he gets a pension from that company.
U.S. Bank was Freddie Mac’s second largest seller/servicer last year, with nearly $52 billion of mortgage sold to the agency (12% of the unpaid principal balance of its total purchases). In 1Q13, U.S. Bank sold $13 billion to Freddie Mac (its third largest residential seller/servicer). U.S. Bank is also the third largest servicer of Freddie Mac residential loans, at $142 billion.
So in order to avoid potential conflicts of interest, Hartnack will recuse himself from decisions affecting U.S. Bancorp that might be considered by the board or its committees.
In a press release, Christopher Lynch, Freddie’s chairman, said, “Freddie Mac will benefit from Rick’s detailed knowledge of underwriting, servicing, technology and his dedication to operational excellence.”