On July 16, the Fifth Circuit Court of Appeals ruled that the Federal Housing Finance Agency (FHFA) which oversees two government services enterprises (GSEs), is unconstitutionally structured because it is excessively insulated from Executive Branch oversight.
The FHFA was created by the Housing and Economic Recovery Act of 2008 (HERA) to oversee Fannie Mae and Freddie Mac. The parties challenging the FHFA’s constitutionality were shareholders of the GSEs who were seeking to invalidate an amendment to a preferred stock agreement between the Treasury and the FHFA as conservator for the GSEs that required the GSEs to pay quarterly dividends to the government equal to the GSEs’ excess net worth after accounting for prescribed capital reserves.
Counsel for the Plaintiffs, David H. Thompson of Cooper & Kirk, discusses the decision and its implications.
Featuring:
David H. Thompson, Managing Partner, Cooper & Kirk PLLC
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