A Conservative Court Awakening – The Wall Street Journal



President Biden fired Trump Federal Housing Finance Agency (FHFA) director Mark Calabria immediately after the Supreme Court ruled Wednesday that he could. While Mr. Calabria’s dismissal is bad news for taxpayers, the conservative majority’s decision in Collins v. Yellen strikes a blow for the Constitution’s separation of powers.

Congress created the FHFA amid the housing market meltdown to regulate the underwater government-sponsored enterprises Fannie Mae and Freddie Mac. We argued that the giants should be unwound, but the Bush Treasury and FHFA placed them under conservatorship. In return for its backstop, Treasury received senior preferred stock and quarterly dividends.

The Obama Treasury and FHFA then decided to sweep their earnings. Fannie and Freddie shareholders sued, arguing that the sweep exceeded the FHFA’s authority and that the 2008 housing law’s restrictions on the President’s power to remove the director violated the separation of powers.

The Court unanimously rejected the first argument, and the six conservative Justices also struck down the removal restrictions. Justice Samuel Alito’s majority opinion cites the Court’s Seila Law decision last term, which held that similar limitations on the President’s ability to remove the Consumer Financial Protection Bureau (CFPB) director violated the separation of powers.

On first look, the Court doesn’t appear to break new constitutional ground. But as Justice Sonia Sotomayor writes in a dissent joined by Justice Stephen Breyer, the majority significantly broadened Seila Law, which was cabined to single directors of independent agencies who wield “significant executive power” over private citizens.

Like it? Share with your friends!



Your email address will not be published. Required fields are marked *

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Voting to make decisions or determine opinions
Formatted Text with Embeds and Visuals
The Classic Internet Listicles
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Upload your own images to make custom memes
Youtube, Vimeo or Vine Embeds
Soundcloud or Mixcloud Embeds
Photo or GIF
GIF format