Writing for a majority of the court, Justice
The ruling paves the way for President
The justices sent the case involving FHFA, which was created during the 2008 financial crisis, back to a lower court for additional proceedings.
Shareholders of the two companies had argued that the FHFA's structure was unconstitutional and that the justices should set aside a 2012 agreement under which the companies have paid the government billions. That money is compensation for the taxpayer bailout that
The justices declined to do what shareholders asked and set aside the entire 2012 agreement.
The "FHFA’s structure violates the separation of powers, and we remand for further proceedings to determine what remedy, if any, the shareholders are entitled to receive on their constitutional claim,” Alito wrote.
The justices noted that the agreement the shareholders complained about was entered into by an acting director of the agency, who was removable by the president for any reason. The justices said that conclusion “defeats the shareholders' argument for setting aside” the agreement in its entirety.
The case is in many ways similar to one the justices decided last year involving the FHFA’s companion agency, the
In the case involving the bureau, the court struck down restrictions
Just as the bureau's leader was, the director of the FHFA is nominated by the president and confirmed by the
In a statement issued after the ruling Calabria, the current FHFA director, called the job the honor of a lifetime and said he respected the decision and the authority of the president. He added that while the FHFA acted “quickly and effectively to provide relief to homeowners and renters impacted by the COVID-19 pandemic” problems remained and he wished his successor “all the best in fixing the remaining flaws of the housing finance system in order to preserve homeownership opportunities for all Americans.”
Shares of
The two consolidated cases the court ruled in are Collins v. Yellen, 19-422, and Yellen v. Collins, 19-563.
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