Supreme Court Will Review Constitutionality of FHFA’s Single-Director Structure

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The Supreme Court recently granted certiorari to determine whether the single-director structure of the Federal Housing Finance Agency (FHFA) violates the Constitution’s separation-of-powers principles.

The FHFA is headed by a single Director, appointed by the President with the Senate’s consent, who is removable only for cause.  In its 2020 term, the Court will review the Fifth Circuit’s holding that the FHFA’s for-cause removal policy unconstitutionally insulates the FHFA Director from presidential oversight.  This case comes on the heels of the Supreme Court’s recent holding that a nearly identical single-director structure at the Consumer Financial Protection Bureau (CFPB) violated the Constitution.  The Fifth Circuit opinion at issue here was decided before the Supreme Court ruled in the CFPB case that the Constitution prohibits independent agencies with a single director who is not removable at the President’s discretion. 

If the Court applies the logic of its CFPB ruling to find the FHFA structure unconstitutional, it will also decide whether courts must “set aside a final agency action that FHFA took when it was unconstitutionally structured.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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