Collins v. Mnuchin
Issues
Does the structure of the Federal Housing Finance Agency (“FHFA”) violate the separation of powers; and if so, must the Court invalidate FHFA’s conservatorship of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation?
This case asks the Supreme Court to determine whether the structure of the Federal Housing Finance Agency (“FHFA”) is unconstitutional. If so, this structure may render the placement of the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) into FHFA’s conservatorship void. Respondent Secretary of the Treasury Steven T. Mnuchin argues that the succession and anti-injunction clauses of the Housing and Economic Recovery Act of 2008 (“Recovery Act”) bar Collin’s claim because that claim is derivative. Mnuchin asserts the Recovery Act’s removal clause does not invalidate the challenged amendment to the FHFA’s agreement with the Treasury Department and that the court should sever the removal clause from the rest of the statute. Petitioner Patrick J. Collins counters that neither the succession clause nor the anti-injunction clauses bar a direct suit under the Administrative Procedure Act (“APA”). Collins contends that the Court’s response to the removal clause should set aside both the challenged amendment to FHFA’s agreement with the Treasury and the Recovery Act’s conservatorship clause. This case's outcome has implications for the separation of powers and protections for “for-cause” removal. The case could impact private individuals' incentives to bring constitutional challenges to the court and the government’s ability to intervene in moments of economic crises.
Questions as Framed for the Court by the Parties
(1) Whether the Federal Housing Finance Agency’s structure violates the separation of powers; and (2) whether the courts must set aside a final agency action that FHFA took when it was unconstitutionally structured and strike down the statutory provisions that make FHFA independent.
Congress established the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) to stabilize the housing market and to increase the public’s access to mortgage credit in 1938 and 1970, respectively. Collins v. Mnuchin at 564.
Edited by
Additional Resources
- Lawrence Hurley, U.S. Supreme Court to Weigh Shareholder Suit Over Fannie Mae, Freddie Mac, Reuters (Jul. 9, 2020).
- Joseph A. Smith, Jr., A Tale of Two Agencies: The Travails of the CFPB and FHFA – Chapter 2: The Seila Law Decision, Global Financial Markets Center, Duke University School of Law (Jul. 8, 2020).