Fifth Circuit Holds That FHFA is Unconstitutionally Structured

The decision by the United States Court of Appeals for the Fifth Circuit earlier this week in Collins v. Mnuchin holding that the structure of the Federal Housing Finance Agency (FHFA) is unconstitutional is an important development not only for the FHFA but also for the constitutionality of the CFPB.  The per curiamopinion in Collins almost guarantees that the Supreme Court will grant cert in the near future on whether the FHFA, the CFPB and similarly structured agencies are unconstitutional. In addition, a powerful dissent by Judge Don Willett, who is on President Trump’s published list of potential Supreme Court candidates, also increases the possibility that the Supreme Court may grant cert on a separate issue: whether the FHFA exceeded its statutory authority as conservator of Fannie Mae and Freddie Mac when it agreed to the  net worth sweep amendment without the consent of their non-government shareholders.