Collins v. Yellen

Background

In 2008 Congress created the Federal Housing Finance Agency (FHFA) to supervise two large mortgage companies, Fannie Mae and Freddie Mac, after a housing‑market collapse. The FHFA is led by a single Director who can be removed by the President only “for cause.” The FHFA put both companies into conservatorship and reached funding deals with the Treasury Department. In 2012 the FHFA and Treasury replaced a fixed dividend with a “net‑worth sweep” that diverted the companies’ quarterly excess earnings to the Government. A group of shareholders sued, arguing the FHFA exceeded its conservator authority and that the FHFA’s single‑Director structure unconstitutionally limited Presidential control.

Reasoning

The Court first rejected the shareholders’ statutory claim. It found the Recovery Act’s anti‑injunction clause bars courts from restraining or undoing FHFA actions taken “as a conservator.” The Court explained the FHFA’s conservatorship powers are broad and permitted the Agency to adopt the third amendment to protect Treasury’s capital and market stability. On the constitutional claim, the Court applied last Term’s reasoning in Seila Law and held a for‑cause removal restriction for the head of a single‑Director independent agency violates the separation of powers. The Court found the shareholders had standing, that the removal restriction does not cover Acting Directors, and that the validity of any retrospective relief must be decided below because the Officers were lawfully appointed.

Real world impact

The decision makes it easier for Presidents to remove the FHFA Director and reduces independence protections for similar single‑Director agencies. Because the Recovery Act limits court intervention in conservatorships, many FHFA actions are insulated from judicial undoing. The shareholders’ request for retrospective money relief survives, but the scope and availability of that remedy were left to the lower courts.