Months after ruling on the constitutionality of the structure of the Consumer Financial Protection Bureau, the Supreme Court has agreed to address the issue for another federal agency.
The Supreme Court granted writs of certiorari to a pair of cases, Collins v. Mnuchin and Mnuchin v. Collins, which will be consolidated and heard in the court’s fall term. The Supreme Court released its October argument schedule and the case is not on the list, meaning the earliest the case would be heard is Nov. 2.
The cases involve shareholders of Fannie Mae and Freddie Mac suing the Federal Housing Finance Agency (FHFA) and the Treasury Department for what’s known as the net worth sweep, which took the dividends on senior preferred stock from Fannie and Freddie and gave them to Treasury as part of the conservatorship of the agencies. Shareholders who were wiped out by the deal are suing to be made whole.
Among the arguments made by shareholders is that the single-director structure of FHFA is unconstitutional.
The Supreme Court recently determined that the CFPB’s single-director structure, which is similar to FHFA, was unconstitutional because it provided that an executive official was not able to be removed by the president at-will.
The Fifth Circuit Court of Appeals en banc ruling determined that FHFA’s structure was unconstitutional. However, the court determined that the shareholders were no entitled to relief, only a declaration that the structure is unconstitutional.
In granting the writs of certiorari, the Supreme Court said a total of one hour would be allotted for oral arguments in the case.