Collins v. Yellen

Background

A group of private shareholders sued the Federal Housing Finance Agency (the FHFA) and the Treasury after the FHFA placed Fannie Mae and Freddie Mac into conservatorship following the 2008 housing crisis. Treasury provided capital and later secured senior preferred shares and a dividend arrangement. A 2012 “third amendment” changed the dividend to sweep most quarterly net worth to Treasury, and shareholders challenged that amendment as exceeding the FHFA’s conservator powers and argued the FHFA Director’s five‑year term and “for‑cause” removal protection violated the separation of powers.

Reasoning

The Court held the shareholders’ statutory challenge is barred by the Recovery Act’s anti‑injunction clause because the FHFA’s third amendment fell within its broad conservator authority to act as it deemed necessary to preserve market stability. The Court nonetheless found the statute’s restriction on the President’s ability to remove a confirmed FHFA Director unconstitutional, applying the Court’s recent reasoning about single‑director independent agencies. The Court explained that the removal restriction does not extend to Acting Directors, found the shareholders had standing for their constitutional claim, and left factual and remedial questions to the lower courts to decide.

Real world impact

The ruling leaves the conservatorship and the 2012 amendment in place for now while making it constitutionally easier for a President to remove a confirmed FHFA Director. Shareholders lost their primary statutory path to block or unwind the “net worth sweep,” but may still seek limited retrospective relief if lower courts find the removal protection caused compensable harm.

Dissents or concurrances

Several Justices wrote separately. A notable dissent argued the FHFA is materially different from the agency invalidated in Seila Law and that Congress’s decision to provide for‑cause protection should be upheld.