Fifth Third Bancorp, Ohio's largest lender, fired Chief Legal Officer Heather Russell last month after she disclosed a romantic relationship with the chief executive officer of Fannie Mae, Timothy Mayopoulos, The Wall Street Journal reported.
Russell disclosed the relationship to Fifth Third and was terminated as a result, according to a statement she provided to the Journal, the newspaper reported Thursday. Russell said she never had any interactions or dealings with Fannie Mae during her time at Fifth Third and denied that there was a conflict of interest, according to the report, which said the two are still in a relationship.
"A personal matter has been brought to our attention that Fifth Third believes represents a conflict of interest," Larry Magnesen, a spokesman for Fifth Third, said in an emailed statement to Bloomberg. "To resolve this, we determined that the best course of action was a separation."
Mortgage lenders including Cincinnati-based Fifth Third sell Fannie Mae and Freddie Mac mortgages that are later bundled into securities that have the government's backing. The firms stand behind about half of new U.S. mortgages, compared with a third in 2005, according to the Urban Institute.
Fifth Third declined to comment beyond the statement, which also said Russell "is a very qualified lawyer, and this matter has nothing to do with any of the legal work done by Heather during her tenure at Fifth Third."
Russell, who joined Fifth Third in September, didn't respond to a request for comment made through LinkedIn.
Mayopoulos disclosed the relationship to Fannie Mae's Office of Compliance and Ethics, which provided appropriate direction to the chief executive, Fannie Mae said in an emailed statement to Bloomberg.
"Mayopoulos has no involvement in Fannie Mae's relationship with Fifth Third Bank," the company said in the statement. "Quite simply, there is no conflict of interest under Fannie Mae's corporate policies."
Fifth Third appointed Grant Harbrecht, the bank's chief compliance officer, as its interim chief legal counsel, Magnesen said. A search for Russell's permanent replacement is under way.
