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On June 23rd, 2021 the Supreme Court decided Collins v. Yellen, a case which concerned the constitutionality of the structure of the Federal Housing Finance Agency. Joining me today to discuss this decision is Jason Levine, Partner at Alston & Bird, and Jeffrey McCoy, Attorney at the Pacific Legal Foundation.
Collins v Yellen, (2021), was a United States Supreme Court case dealing with the structure of the Federal Housing Finance Agency (FHFA). The case follows on the Court's prior ruling in Seila Law LLC v Consumer Financial Protection Bureau, which found that the establishing structure of the Consumer Financial Protection Bureau (CFPB), with a single director who could only be removed from office "for cause", violated the separation of powers; the FHFA shares a similar structure as the CFPB. The case extends the legal challenge to the federal takeover of Fannie Mae and Freddie Mac in 2008. In a two-part decision, the Supreme Court ruled that the restriction on removal of the FHFA director by the President was unconstitutional in light of Seila Law, and secondly, dismissed the lawsuit brought against the FHFA by shareholders of Fannie Mae and Freddie Mac as the takeover of these firms was an established power of the agency under terms of the Housing and Economic Recovery Act of 2008. Background. Part of the contributing factors to the subprime mortgage crisis from 2007 to 2010 was the role of Fannie Mae and Freddie Mac, for-profit government sponsored enterprises (GSE) that purchase mortgages and backed almost half of the mortgages in the United States. Analysis had found that the two GSEs had purchased a number of risky mortgages, those offered at below the prime interest rate as to encourage home ownership, during the housing market peak in 2005 and 2006 and represented a large risk should they fail. At the start of the crisis, the rationalization of the number of these low-interest mortgages disrupted the banking system, causing some larger banks to go into bankruptcy or seek means to avoid this, which disrupted the credit system and further exacerbated the crisis and caused a recession. Congress passed the Housing and Economic Recovery Act of 2008 in July of that year to try to stave off the effects of the recession. Among the law's goals included the formation of the Federal Housing Finance Agency (FHFA), merging the existing Federal Housing Finance Board (FHFB) and Office of Federal Housing Enterprise Oversight (OFHEO). The new FHFA was run by a single Director, with James B. Lockhart III, the prior Director of OFHEO, named to the initial position. In September 2008, Lockhart issued an order to bring in Fannie Mae and Freddie Mac under FHFA's authority for the purposes of stabilizing both GSEs using funds allocated by Congress as a means to alleviate the mortgage crisis. As part of this takeover, once the mortgage crisis was subdued in 2012, the FHFA routed the ongoing profits earned by Fannie Mae and Freddie Mac to the Treasury Department on the basis that these funds were needed to offset the taxpayers' costs of the government's intervention to resolve the crisis. The decision also prevents both GSEs from using Treasury funds to pay their shareholders. Shareholders of both companies challenged the government's actions, stating that these decisions prevents the company from building capital and is excessive governmental overreach. --- Send in a voice message: https://anchor.fm/law-school/message Support this podcast: https://anchor.fm/law-school/support
Welcome to the second year of Coale Mind!In a previous episode of this podcast, I questioned whether the U.S. Court of Appeals for the Fifth Circuit – the federal appellate court for Texas, Louisiana, and Mississippi – may have grown more conservative than the U.S. Supreme Court under the leadership of Chief Justice Roberts. In particular, I looked at two Fifth Circuit cases that the Supreme Court reviewed in the last term—Collins v. Yellen, about the structure of the regulator for Fannie Mae and Freddie Mac—and California v. Texas, about the constitutionality of the Affordable Care Act. The Supreme Court has now ruled and the answer to the question is . . . it depends. These cases ultimately show that not all conservativism is the same . . . .
Collins v Yellen, (2021), was a United States Supreme Court case dealing with the structure of the Federal Housing Finance Agency (FHFA). The case follows on the Court's prior ruling in Seila Law LLC v Consumer Financial Protection Bureau, which found that the establishing structure of the Consumer Financial Protection Bureau (CFPB), with a single director who could only be removed from office "for cause", violated the separation of powers; the FHFA shares a similar structure as the CFPB. The case extends the legal challenge to the federal takeover of Fannie Mae and Freddie Mac in 2008. In a two-part decision, the Supreme Court ruled that the restriction on removal of the FHFA director by the President was unconstitutional in light of Seila Law, and secondly, dismissed the lawsuit brought against the FHFA by shareholders of Fannie Mae and Freddie Mac as the takeover of these firms was an established power of the agency under terms of the Housing and Economic Recovery Act of 2008. Background. Part of the contributing factors to the subprime mortgage crisis from 2007 to 2010 was the role of Fannie Mae and Freddie Mac, for-profit government sponsored enterprises (GSE) that purchase mortgages and backed almost half of the mortgages in the United States. Analysis had found that the two GSEs had purchased a number of risky mortgages, those offered at below the prime interest rate as to encourage home ownership, during the housing market peak in 2005 and 2006 and represented a large risk should they fail. At the start of the crisis, the rationalization of the number of these low-interest mortgages disrupted the banking system, causing some larger banks to go into bankruptcy or seek means to avoid this, which disrupted the credit system and further exacerbated the crisis and caused a recession. Congress passed the Housing and Economic Recovery Act of 2008 in July of that year to try to stave off the effects of the recession. Among the law's goals included the formation of the Federal Housing Finance Agency (FHFA), merging the existing Federal Housing Finance Board (FHFB) and Office of Federal Housing Enterprise Oversight (OFHEO). The new FHFA was run by a single Director, with James B. Lockhart III, the prior Director of OFHEO, named to the initial position. In September 2008, Lockhart issued an order to bring in Fannie Mae and Freddie Mac under FHFA's authority for the purposes of stabilizing both GSEs using funds allocated by Congress as a means to alleviate the mortgage crisis. As part of this takeover, once the mortgage crisis was subdued in 2012, the FHFA routed the ongoing profits earned by Fannie Mae and Freddie Mac to the Treasury Department on the basis that these funds were needed to offset the taxpayers' costs of the government's intervention to resolve the crisis. The decision also prevents both GSEs from using Treasury funds to pay their shareholders. Shareholders of both companies challenged the government's actions, stating that these decisions prevents the company from building capital and is excessive governmental overreach. --- This episode is sponsored by · Anchor: The easiest way to make a podcast. https://anchor.fm/app
In this episode of S&C's Critical Insights, litigation partners Judd Littleton and Julia Malkina introduce the second annual podcast series accompanying S&C's Supreme Court Business Review. The Review summarizes the decisions from each Term that are most relevant to business leaders, and offers practical guidance on the implications of those decisions. Judd and Julia preview upcoming episodes and discuss two of the most interesting and closely watched business-related decisions from this Term: the Court's June 23 decision in Collins v. Yellen, in which the Court considered a constitutional challenge to the statutory limits on the President's ability to remove the director of the Federal Housing Finance Authority; and the Court's June 17 decision in California v. Texas, in which the Court considered another legal challenge to the constitutionality of the Affordable Care Act. Visit us at www.sullcrom.com
On June 23, 2021, the U.S. Supreme Court in Collins v. Yellen held 7-2 that 1) because the Federal Housing Finance Agency did not exceed its authority under the Housing and Economic Recovery Act of 2008, the anti-injunction provisions of the Recovery Act bar the statutory claim brought by shareholders of Fanne Mae and Freddie […]
On June 23, 2021, the U.S. Supreme Court in Collins v. Yellen held 7-2 that 1) because the Federal Housing Finance Agency did not exceed its authority under the Housing and Economic Recovery Act of 2008, the anti-injunction provisions of the Recovery Act bar the statutory claim brought by shareholders of Fanne Mae and Freddie Mac; and 2) the Recovery Act's structure violates the separation of powers.Justice Alito wrote the majority opinion. Justice Gorsuch joined the opinion as to all but Part III–C, Justices Kagan and Breyer joined as to all but Part III–B, and Justice Sotomayor joined as to Parts I, II, and III–C. Justice Thomas filed a concurring opinion. Justice Gorsuch filed an opinion concurring in part. Justice Kagan filed an opinion concurring in part and concurring in the judgment, in which Justices Breyer and Sotomayor joined as to Part II. Justice Sotomayor filed an opinion concurring in part and dissenting in part, in which Justice Breyer joined.Two experts will discuss the ruling and its implications for administrative law, the separation of powers, and more.Featuring: -- Jason Levine, Partner, Alston & Bird-- Jeffrey McCoy, Attorney, Pacific Legal Foundation
SCOTUS Rules on FHFA's Leadership Structure In this episode, Mark discusses NCLA's amicus win in the Supreme Court case Collins v. Yellen. This week, a divided Supreme Court held that the structure of the Housing and Economic Recovery Act of 2008 violated the separation of powers. The law ran afoul of the Constitution by restricting the President's power to remove the Director of the Federal Housing Finance Agency (FHFA). NCLA filed an amicus brief in September 2020 arguing that the FHFA Director's protection from removal denied the President's power to control the actions of Executive Branch officials. In Justice Alito's opinion for the Court, the judgment of the Fifth Circuit was affirmed under reasoning that the prohibition against independent agencies headed by a single official applies broadly. The Court fully endorsed last year's holding in Seila Law LLC v. Consumer Financial Protection Bureau, which held that it was unconstitutional for the Director of CFPB to be insulated from presidential removal. As NCLA argued, virtually all the factors cited by Seila Law as reasons for concluding that CFPB's structure ran afoul of separation-of-powers principles are fully applicable to FHFA's structure: each is headed by a single Director who is appointed to a five-year term and may not be removed by the President before the end of that term except for cause. Read more about the case here: https://nclalegal.org/collins-v-yellen/ SCOTUS Delivers Opinion on Appointments Clause Case Later in the episode, Vec talks about NCLA's amicus win in U.S. v. Arthrex, a Supreme Court case about administrative patent judges (APJs) and the Appointments Clause. In a win against the Administrative State, a divided Supreme Court ruled that APJs have either been exceeding their proper authority or else have been appointed improperly. If granted unreviewable authority to invalidate existing patents, then APJs are “principal officers” who must be appointed by the President with the Senate's advice and consent. APJs had previously been appointed by the U.S. Secretary of Commerce in violation of the Appointments Clause of the U.S. Constitution. In 2011 the America Invents Act (AIA) shifted adjudication of important property rights from the judiciary to bureaucrats not directly answerable to elected officials. The Court's opinion, written by Chief Justice Roberts, vacated the judgment of the U.S. Court of Appeals for the Federal Circuit. The Court held that APJs were not appointed to their positions in the manner Article II of the Constitution requires. The Court fixed the constitutional problem by striking a provision of the law that barred the Director of the Patent and Trademark Office from reviewing decisions issued by APJs. Read more about the case here: https://nclalegal.org/united-states-v-arthrex-inc-et-al-united-states-v-polaris-innovations-ltd-et-al-smith-nephew-inc-and-arthrocare-corp-v-arthrex-inc-and-united-states/ See omnystudio.com/listener for privacy information.
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Will and Dan break down two more decisions from Wednesday. First is Collins v. Yellen, a complicated separation of powers and severability case with a lot of money on the line. Second is Lange v. California, a Fourth Amendment case about the "hot pursuit" doctrine, which gives rise to some high school confessions.
A case in which the Court held that the Federal Housing Finance Agency's (FHFA) structure violates the separation of powers but that courts need not set aside the final agency action that FHFA took when it was unconstitutionally structured.
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