The U.S. Supreme Court ruled Wednesday that the director of the Federal Housing Finance Agency can be removed at will by the president, overturning the current structure that allows the director to be removed before the end of their five-year term for cause. The decision in Collins v. Yellen found that the FHFA’s structure is unconstitutional.
“We’re disappointed in today’s decision as it removes political independence from an entity that affects the entire financial services marketplace,” said CUNA President/CEO Jim Nussle. “Stability at the FHFA is vital to the stability of the entire secondary mortgage market.”
The decision is similar in nature to the one in Seila Law v. CFPB, which found in June 2020 that severed the “for cause” removal provision in the Dodd-Frank Act, effectively allowing any president to remove the CFPB director at will. The Court applied the same analysis here, affirming the lower court’s decision to sever language in the Housing and Economic Recovery Act of 2008 establishing the unconstitutional structure.
Current FHFA Director Mark Calabria was appointed to lead the FHFA by President Donald Trump in April 2019.