June 2021

In Collins v. Yellen, the United States Supreme Court ruled that restrictions on the president’s power to remove the director of the Federal Housing Finance Agency (FHFA) violated the separation of powers. In its June 23 ruling, the court also rejected the argument that the FHFA’s actions at issue in the case went beyond the agency’s legal authority.

Judge Samuel Alito delivered the court’s opinion, writing that the Housing and Economic Recovery Act (HERA) prevents shareholders from challenging FHFA rulings in court since the agency acted within its bounds. powers. However, he also wrote that “the Constitution prohibits even ‘modest restrictions’ on the president’s power to remove the head of an agency with a single senior official.” The end of the notice says that the FHFA’s agents were properly appointed, but lower courts should determine whether the unconstitutional restriction on the president’s dismissal power caused harm which gives shareholders the right to seek redress in court. federal court.

Justice Clarence Thomas wrote a concurring opinion stating that actions taken by federal officials are not necessarily illegal simply because a restriction on the president’s dismissal power over them is illegal in the abstract.

Judge Neil Gorsuch wrote a partly concurring opinion in which he argued that the distinction between unconstitutionally appointed officials and unconstitutionally isolated officials should not preclude the court from ruling that an official acted without constitutional authority.

Judge Elena Kagan wrote an opinion partly concurring and concurring with the judgment and Judges Stephen Breyer and Sonia Sotomayor joined Part II of her opinion. Kagan agreed with the majority that the FHFA did not overstep the limits of its powers, but only agreed to hold the agency’s structure unconstitutional out of respect for precedents. Part II of his opinion agreed with the majority that it would be fair to rescind FHFA’s actions only if the president’s inability to fire the director affected those actions.

Judge Sonia Sotomayor wrote a partly concurring and partly dissenting opinion, joined by Judge Breyer. Sotomayor agreed with parts of the majority opinion supporting FHFA’s actions under HERA and discussing potential remedies after the case is referred. On the constitutional question, she argued that the court had misapplied the precedent of Seila Law (2020). She wrote: “The Court has shown itself to be far too eager in recent years to engage in agency structural issues that are best left to Congress.

The court’s decision to keep the unconstitutional FHFA structure articulated limits on the types of administrative agencies that Congress can create and reaffirmed the court’s ruling in Seila Law. Each of the judges’ opinions referred to arguments in the debate surrounding presidential control over federal government officials.

The case was consolidated with Yellen v. Collins.

To know more about the case or executive control of agencies see here:

Further reading:

Link to the decision of the Supreme Court of the United States:

Learn more

MOORE – When Marcus Reeves walked into the 2,000 square foot home with two spacious living rooms in east Moore, he knew he wanted to write the next chapter of his family there.

“The first thing that attracted me was the open space. It was like Disney World compared to the last house, ”he said. “I loved my old house, but it was time to move on.”

Reeves and his wife, Shaunt’e, bought their first home in 2008 with help from OHFA Homebuyer Down Payment Assistance from the Oklahoma Housing Finance Agency.

After renting an apartment, purchasing the 1,154 square foot home in Del City offered the opportunity to invest in their family’s future.

“We knew it wasn’t going to be our home forever, but we knew it would be an opportunity for us to build toward it,” said Marcus Reeves. “Helping with a down payment offered the opportunity to bring our vision to life. “

With a mortgage payment of just $ 30 more than the couple paid in rent, buying a home made perfect sense.

Over the next 12 years, they wrote the first chapter in their family history. As their children, Marcus, 14, and Mariah, 10, grew up, the Reeves family needed more space.

The COVID-19 pandemic has consistently placed all four of the family and their dog, Rocky, in the house at the same time. Space was tight.

Last fall, their goal was to sell their home and buy a home that better meets their needs. They reviewed their finances and focused on buying a home that would still be within their means.

Before putting the house on the market, Marcus Reeves worked for two months to improve it. He installed new flooring, added ceiling fans, painted walls, and made other updates to maximize its value.

The hard work paid off with a bidding war and an accepted offer 15% above the asking price.

They used the considerable escrow from the sale to pay the down payment and closing costs on their new home. OHFA’s DREAM ZERO loan product offered an interest rate of 2.25%, which will save them money over the life of the loan.

“The down payment assistance not only helped purchase a first home for this family, but also enabled them to be successful in purchasing their second home,” said Deborah Jenkins, Executive Director of OHFA. “We pride ourselves on providing opportunities for buyers statewide, no matter where they are on their homeownership journey. “

Learning that an OHFA product could make an impact again came as a welcome surprise to the Reeves.

“OHFA helped us get our first home,” Shaunt’e Reeves said. “We couldn’t have bought this house without OHFA. When we moved into this house, OHFA helped us again by helping us get the lowest interest rate.

With two living areas, the new home offers plenty of space for friends and family to visit. On Friday evenings, they watch movies and play games in the movie theater.

Not only did homeownership boost stability and wealth creation in their own household, it also inspired Shaunt’e Reeves’ mother, Deborah Parker, to become a first-time buyer.

“I wasn’t sure if I could have a home at my age since I’m retired,” Parker said. “I see owning a house as an investment in myself. “

Shaunt’e Reeves guided her mother through every step of the home buying process, including helping her navigate on a smartphone and homebuyer education classes run through Zoom.

“I told my mom you can always make your dreams come true. She always wanted to own a house. She decided she was going to go, ”she said.

Parker purchased a home with a down payment assistance grant from the City of Midwest City, provided by OHFA’s HOME investment partnership program. She has taken virtual homebuyer education classes through Neighborhood Housing Services Oklahoma.

After renting a room in a house for several years, Parker is thankful that she finally has a place of her own.

“I love the space in my house,” she said. “He’s got a lot of character. “

Shaunt’e Reeves admits that when she and Marcus bought their first home, they knew little about the process.

“We were just children. We would have fallen in love with anything, ”she said.

As the first member of their family to buy a home, the education classes for home and real estate buyers turned out to be an eye-opening experience.

“I come with knowledge,” Shaunt’e Reeves said. “I know the legal aspects of buying a home, that it is illegal to be directed to a certain area based on your skin color.”

Marcus and Shaunt’e Reeves see owning a home as an example to their family members that anything is possible.

“Goals don’t come out of nowhere,” Marcus Reeves said. “This is a crucial time to not only teach children how to set goals, but to show them. “

Visit www.ohfa.org to learn more about OHFA’s program offerings.

Originally posted on the OHFA website.

It is essential that the agency implements the housing policies of the Biden administration, the official said, and “the president is moving forward today to replace the current director with an appointee who reflects the values of the administration “.

The Supreme Court’s decision was not unexpected. The court ruled last year that the single-director structure of the Consumer Financial Protection Bureau, also created in response to the financial crisis, overstepped the separation of powers provided for in the Constitution. The court relied on this same reasoning on Wednesday.

The ruling sends the case back to a lower court for next steps regarding claims filed by shareholders who argue that FHFA’s actions in the Treasury Department’s bailout of Fannie and Freddie have allowed the government to benefit from legitimate benefits.

Judge Neil M. Gorsuch, in a separate opinion which concurred with most of the majority views, pointed out that new presidents still inherit thousands of executive officials they do not select.

“It is the power to oversee – and, if necessary, remove – subordinate officials that enables a new president to shape his administration and respond to the electoral will that propelled him to power,” Gorsuch wrote.

B-333259

May 18, 2021

The Honorable Sherrod Brown
President
The Honorable Patrick J. Toomey
Ranking Member
Banking, Housing and Urban Affairs Commission
United States Senate

The Honorable Maxine Waters
President
The Honorable Patrick McHenry
Ranking Member
Financial Services Commission
House of Representatives

Topic:
Federal Housing Finance Agency: resolution planning

Pursuant to Section 801 (a) (2) (A) of Title 5, United States Code, this is our report on a major rule promulgated by the Federal Housing Finance Agency (FHFA) entitled “Resolution Planning” (RIN: 2590- AB13). We received the rule on April 28, 2021. It was published in the Federal Register as final rule on May 4, 2021. 86 Fed. Reg. 23577. The effective date is July 6, 2021.

The FHFA said this final rule requires Fannie Mae and Freddie Mac (the companies) to make plans to facilitate their swift and orderly resolution in the event the FHFA is appointed receiver. According to the FHFA, a resolution planning rule is an important part of the FHFA’s ongoing efforts to develop a strong prudential regulatory framework for businesses, including capital, liquidity and stress testing requirements, as well. and enhanced supervision, which will be essential to the supervision of the FHFA. Companies, in particular in the event of withdrawal from supervision. The FHFA says requiring companies to develop resolution plans would support its efforts as a corporate receiver to, among other things, minimize disruption in domestic housing finance markets by ensuring the continued functioning of key sectors of the economy. ‘activity of a company by a limited life regulated entity; ensure that private sector investors in corporate securities, including corporate debt, bear losses in accordance with statutory priority of payments while minimizing losses and unnecessary costs to such investors. Finally, the FHFA said resolution planning will help foster market discipline in part through the publication by the FHFA of “public” sections of corporate resolution plans.

Attached is our assessment of the FHFA’s compliance with the procedural steps required by Section 801 (a) (1) (B) (i) to (iv) of Title 5 in relation to the rule. If you have any questions about this report or would like to contact the GAO officials responsible for the assessment work related to the purpose of the rule, please contact Shari Brewster, Deputy General Counsel, at (202) 512-6398.

Shirley A. Jones
Associate Legal Director

Pregnant

cc: Clinton Jones
General Counsel
Federal Housing Finance Agency

PREGNANT

REPORT UNDER 5 USC § 801 (a) (2) (A) ON A MAJOR RULE
ISSUED BY THE
FEDERAL HOUSING FINANCING AGENCY
ENTITLED
“RESOLUTION PLANNING”
(RIN: 2590-AB13)

(i) Cost-benefit analysis

In its communication to us, the Federal Housing Finance Agency (FHFA) indicated that it considered that the preparation of a cost-benefit analysis of this final rule was not applicable.

(ii) Agency actions relating to the Regulatory Flexibility Act (RFA), 5 USC §§ 603-605, 607 and 609

The Advocate General of the FHFA has certified that this final rule will not have a significant economic impact on a substantial number of small entities because the final rule only applies to Fannie Mae and Freddie Mac (the companies), who do not are not small entities for RFA purposes. .

(iii) Agency Actions Regarding Sections 202-205 of the Unfunded Mandates Reform Act 1995, 2 USC §§ 1532-1535

As an independent regulatory body, the FHFA is not subject to the Act. See 2 USC §§ 658 (1), 1502 (1); 44 USC § 3502 (5).

(iv) Other relevant information or requirements under laws and decrees

Administrative Procedure Act, 5 USC §§ 551 et seq.

On January 8, 2021, the FHFA published a notice of proposed regulation, associated with this final rule, in the Federal Register. 86 Fed. Reg. 1326. The FHFA said it received 14 comments on the proposed rule, including comments from individual companies, the Mortgage Bankers Association, the American Bankers Association, the National Association of Home Builders, the Housing Policy Council, the National Association of Realtors, the Center for Responsible Lending and the Heritage Foundation, as well as comments from five people, including a former CEO of Freddie Mac. According to the FHFA, most comments were in favor of resolution planning in general, and many areas suggested that the proposed rule could be improved or clarified. The FHFA dealt with these comments by subject in the preamble to the final rule.

Red Tape Reduction Act (PRA), 44 USC §§ 3501-3520

The FHFA has determined that this final rule does not contain any information gathering requirements that would require the approval of the Bureau of Management and Budget (OMB) under the PRA. Therefore, the FHFA said it did not submit any information to the OMB for review.

Legal authorization of the rule

The FHFA promulgated this final rule in accordance with Sections 4511, 4513 and 4526 of Title 12, United States Code.

Executive Decree No. 12866 (Planning and Revision of Regulations)

As an independent regulatory body, the FHFA is not subject to the ordinance.

Executive Decree No. 13132 (Federalism)

As an independent regulatory body, the FHFA is not subject to the ordinance.