Director Falcon testified about the Office of Federal Housing Enterprise Oversight supplemental agreement with the Fannie Mae board of directors. He answered questions about his interim report on accounting and management failures at the home mortgage company Fannie Mae and made recommendations. Among other changes, the agreement requires separation of the positions of chairman of the board of directors and the chief executive officer, as well as the implementation of controls surrounding account ledger entries. The agreement also requires Fannie Mae, if necessary, to restate earnings relating to newly reviewed accounting standards. Mr. Falcon is resigning in May 2005.