Uncertainty for FHFA, Fannie Freddie After Collins v. Mnuchin Decision

In September 2019, the en bane Fifth Circuit in Collins held that the FHFA, which oversees the operations of Fannie Mae and Freddie Mac, exceeded its powers in entering into arrangement for financing with the Treasury Department. It further held that the FHFA's structure is unconstitutional. With this case, the Fifth Circuit split from five other circuits and has cast uncertainty into the future of the FHFA, while simultaneously offering further possibility of investor recovery. After a January 2020 initial conference, the Supreme Court neither granted nor denied the parties' appeals to hear the case. Concurrently, the Supreme Court is reviewing the constitutionality of the CFPB, a similarly structured agency to the FHFA. With a circuit split and the possibility of certiorari still pending for Collins, this case may still come before the Supreme Court, which would definitively rule on the constitutional status of the FHFA and the statutory claims.