Fannie Mae faces bias suit after mass firing over fraud

Dozens of former Fannie Mae workers are suing their former employer for discrimination, after they were fired en masse in April over fraud allegations. 

The 55 plaintiffs filed the suit Monday evening in the U.S. District Court for the District of Columbia. All are U.S. citizens of Indian origin from a variety of departments, and many were longtime employees, an attorney for the plaintiffs said. The complaint claims Fannie Mae provided no explanation for the mass firing beyond the accusation related to donation activity.

"Many of the employees had worked for Fannie Mae for over a decade with a spotless employment record," said attorney Milt Johns of Fairfax, Virginia-based Executive Law Partners, in an email. "They were identified for termination solely on the basis of making a donation to these charities."

Federal Housing Finance Director Bill Pulte in April publicly announced firing over 100 employees he said had facilitated fraud against Fannie Mae. The government has since not provided additional details beyond its brief announcement.

Spokespersons for both Fannie Mae and the FHFA didn't return requests for comment Tuesday. 

Johns said employees donated to organizations focused on Indian cultural and charitable endeavors, many of which support speakers of the Telugu language in India. No donation exceeded $5,000, and some plaintiffs were fired for making just one donation. 

The lawsuit states the employees made donations to organizations approved and matched by Fannie Mae through an employee portal. A group of at least 80 employees were summoned to a Microsoft Teams call on the morning of April 3, and were told their immediate termination was related to the company's charitable giving program.

Most of the employees fired were over the age of 50, according to the lawsuit. Workers said they received right-to-sue letters from the Equal Opportunity Employment Commission last month, and are seeking reinstatement and damages including administrative leave and severance pay. 

"Plaintiffs were identically terminated for cause as a pretext to the unlawful termination on the basis of their nationality, enabling for Fannie Mae to avoid these payments," the suit read. 

The action appears to be the first legal challenge to actions taken by Pulte since he took the reins as chairman of both Fannie Mae and Freddie Mac earlier this year. The director, who's since dubbed the FHFA U.S Federal Housing, has led a campaign to root out fraud in the system, and has targeted some high-profile Democrats. 

Pulte has also attempted to address other industry concerns, recently announcing a shakeup to the GSEs' usage of credit scores. He's also drawn ire from Democrats over his leadership, including from Senate Banking Committee Ranking Member Sen. Elizabeth Warren, D-Mass., who this week accused him of losing focus on housing in his social media campaign against Federal Reserve Chairman Jerome Powell.