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1 1 (June 28, 2021)

handle is hein.crs/goveduq0001 and id is 1 raw text is: Congressional *Research Service informrng the Iegisltive debate since 19 4 __________________ Supreme Court: Structure of Federal Housing Finance Agency Violates Constitution June 28, 2021 On June 23, the Supreme Court in Collins v. Yellen ruled 7-2 that the structure of the Federal Housing Finance Agency (FHFA) violates the Constitution's separation of powers. The FHFA is headed by a single Director who, under the statute establishing the agency, can only be removed by the President for cause, rather than at will. The single-headed structure of the FHFA contrasts with the multimember structure of most other agencies headed by officials that are similarly insulated from presidential control through for- cause removal protections. The Court's ruling, which comes on the heels of a decision last year invalidating the similarly structured Consumer Financial Protection Bureau (CFPB), will have important implications for Congress's ability to configure agencies in the executive branch with relative independence from the President. The decision also appears to have had immediate practical effect, as President Biden removed the FHFA Director from office the next day. Background The dispute in Collins arose from a financing arrangement the FHFA, acting as a conservator for the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), reached with the Treasury Department. Fannie Mae and Freddie Mac are government- sponsored enterprises (GSEs) that provide liquidity to banks and credit unions to help support the home mortgage market. The Housing and Economic Recovery Act of 2008 (Recovery Act), among other things, established the FHFA to oversee Fannie Mae and Freddie Mac and authorized the FHFA to act as a conservator for them in certain situations. Not long after the FHFA was established, the agency did so and negotiated agreements for Fannie Mae and Freddie Mac with the Treasury Department. Subsequently, the agencies agreed to a series of amendments, the third of which (Third Amendment) led to this litigation. A group of shareholders challenged the Third Amendment on statutory and constitutional grounds. Because the government agreed that the statutory provision restricting the President's removal power was unconstitutional, the Court appointed an amicus curiae to defend the statute. Congressional Research Service https://crsreports.congress.gov LSB10614 CRS Legal Sidebar Prepared for Members and Committees of Congress

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