On December 9, the Supreme Court heard oral arguments in the case of Collins vs Mnuchin—a case brought by the shareholders of the Enterprises (Fannie Mae and Freddie Mac) against the United States Treasury and the Federal Housing Finance Agency (FHFA). While this case centers around shareholders seeking to restore the value of their ownership interests, it has far reaching implications regarding the power a President has over independent government agencies and the ability of government agencies to act independently to protect the health, safety and welfare of the American people.
The case centers on the constitutionality of FHFA’s single director leadership structure appointed by the President (as opposed to a multi-member board) who can’t be fired without cause – a structure that several other independent agencies have, such as the Federal Reserve or the Securities and Exchange Commission. Specifically, the plaintiffs contend (1) the Federal Housing Finance Agency’s structure violates the separation of powers; and (2) "whether the court must set aside a final action that FHFA took when it was unconstitutionally structured and strike down the statutory provisions that make FHFA independent."
If the Supreme Court rules in favor of the plaintiffs, it would make it easier for the President to remove independent agency heads, like the Director of FHFA, Mark Calabria. This, in turn, could impact independent agencies ability to carry out their missions free from political pressure. The court is expected to rule by no later than June 2021. Removal of Director Calabria could bring a halt to, or significantly slow down, Director Calabria’s stated goal of removing the Enterprises from conservatorship.
NMHC and NAA will closely monitor the final ruling of the Supreme Court to determine its impact to the leadership of FHFA.
- FHFA Releases 2021 Scorecard for Fannie Mae and Freddie Mac
- NMHC Meets with FHFA Director
- Treasury and FHFA Agree to Allow GSEs to Build Capital, Remain in Conservatorship
- FHFA Extends Enterprise’s Multifamily Forbearance
- Congress Agrees on a Decade Long Debate on Beneficial Ownership, Advances NDAA