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Okay, I see because Navy posted the order list in his post #749619, and asked the question as to why it says "Petitions for Writs of Certerrori granted". The answer is not that Noel Francisco's Cross Petition was granted as well as the CFPB's Petition but the line, Petitions for Writs of Certerrori granted is for the 2 Petitions granted today on the Order List.
Thanks Family Mang and Clarence for clarifying my error in reading todays Order List!
Clarence, I'm looking forward to the Student loan forgiveness case tomorrow, care to speculate or I'm curious to get your thoughts on the idea of the SCOTUS giving us more clarity and/or bright lines on the Major Questions Doctrine?
It could be a STANDING only ruling and thus bypassing anything cerebral or adding to the MQD.
The Order list: "Petitions for Writs...granted", Navy posted it earlier today (Nice Tweet today, keep up the good work!).
Here's CFPB Petition:
http://www.supremecourt.gov/DocketPDF/22/22-448/246429/20221114155607407_No.%20CFPB%20et%20al.%20v.%20CFSA%20et%20al.pdf
QUESTION PRESENTED
Whether the court of appeals erred in holding that the
statute providing funding to the Consumer Financial
Protection Bureau (CFPB), 12 U.S.C. 5497, violates the
Appropriations Clause, U.S. Const. Art. I, § 9, Cl. 7, and
in vacating a regulation promulgated at a time when the
CFPB was receiving such funding.
Here's Noel Francisco's Cross Petition for a Writ of Certerrori:
CROSS-PETITION FOR
A WRIT OF CERTIORARI
QUESTIONS PRESENTED
This case involves a challenge to the validity of a
single regulation promulgated by the Consumer
Financial Protection Bureau (CFPB or Bureau). As
relevant here, the Rule prohibits a covered lender
from continuing to make preauthorized attempts to
withdraw loan repayments from a consumer’s bank
account after two consecutive attempts are denied for
insufficient funds. 82 Fed. Reg. 54,472, 54,877-79
(Nov. 17, 2017). Cross-Petitioners (the Lenders)
claimed that the Rule is unlawful on several
grounds, and the court of appeals vacated the Rule
on one ground after rejecting the others.
In No. 22-448, the Bureau has filed a certiorari
petition seeking review of the holding below that the
Rule should be vacated because the statute
authorizing the agency’s funding violates the
Appropriations Clause. This Court should deny that
petition for the reasons explained in the Lenders’
opposition brief.
If the Court grants the Bureau’s petition, however,
it should either grant this cross-petition or add to the
Board’s petition two antecedent questions that also
are presented by the judgment under review:
1. Whether the Rule should be vacated because it
was promulgated by Director Cordray while shielded
from removal by President Trump under a statutory
provision this Court later held is unconstitutional.
2. Whether the Rule should be vacated because
the prohibited conduct falls outside the statutory
definition of unfair or abusive conduct.
http://www.supremecourt.gov/DocketPDF/22/22-448/246429/20221114155607407_No.%20CFPB%20et%20al.%20v.%20CFSA%20et%20al.pdf
THAT said, no question that the front and center issue here is the Appropriations Clause issue and REMEDY.
https://finance.yahoo.com/news/fannie-mae-releases-january-2023-210500758.html
Will the SCOTUS force the CFPB (FHFA?) to have Congressional Appropriations Oversight? Senator Elizabeth Warren: "DON'T YOU HURT MY BABY!"
https://www.foxnews.com/politics/supreme-court-hear-arguments-constitutionality-elizabeth-warrens-baby-cfpb
"Warren, now a Democrat senator from Massachusetts, is credited for creating the agency, although she never led it.
Warren's 2020 presidential campaign website says she "came with the idea for the CFPB before the crisis even began and then fought successfully to turn her idea into a reality."
"This agency was Elizabeth’s idea, and through sheer force of will, intelligence, and a bottomless well of energy, she has made, and will continue to make, a profound and positive difference for our country," President Obama said in July 2011."
Trump's former acting CFPB Director Mick Mulvaney even called the agency "Elizabeth Warren’s baby."
On Monday, Warren rejected the push to find it unconstitutional.
"Despite years of desperate attacks from Republicans and corporate lobbyists, the constitutionality of the CFPB and its funding structure have been upheld time and time again," she said.
"If the Supreme Court follows more than a century of law and historical precedent, it will strike down the Fifth Circuit’s decision before it throws our financial markets and economy into chaos."
The CPFB has already sustained a blow to its autonomy from the Supreme Court in 2020 through a Trump administration challenge, in which the nine justices ruled that a president could fire an CPFB director at will. Prior to that decision, a CFPB director, after appointment by the Senate, would serve five years and could only be fired for malfeasance, inefficiency or neglect of duty.
The SCOTUS granted BOTH Plaintiff and Defendant CFPB's Petition for a Writ of Certerrori.
So, presumably they will hear all the issues by both Petitions, the Juicy Appropriations Clause Issue is front and center though AND REMEDY will also be decided.
Remember how we won the Constitutional Claim in Collins but the Remedy was anything but clear cut?
Both the CFPB and the Plaintiffs petitioned for a Writ of Certerrori, the CFPB to reverse the 5th Circuit Appealate Court on the Appropriations Clause Issue and to REVERSE the REMEDY even if the SCOTUS finds that there an Appropriations Clause Violation (i.e., they want Plaintiffs to suffer a Pyrrhic Victory like in Collins).
The Plaintiffs Petition for a Writ of Certerrori sought to REVERSE the 5th Circuit Appealate Panel's Ruling on the 3 or 4 other issues that were DENIED by the 5th Circuit Appealate Panel and invalidate the agency action that way.
Still a lot of unknowns. We will probably speculate quite a bit on this CFPB case going forward until June 2024 when the judicial hammer comes down.
We all thought Collins was a slam dunk, but then the SCOTUS came up with this 'Super Conservator' and 'best interests of the public it serves ' mantra, letting the Incidental Powers of HERA wag the dog of HERA.
AT LEAST 4 HURDLES WILL HAVE TO BE OVERCOME:
(1). The SCOTUS will have to rule that the CFPB funding structure violates the Appropriations Clause
(2). That the REMEDY for the Constitutional Violation is invalidation of the federal agency action.
(3). Subsequent litigation, likely ending at SCOTUS says that the HERA funding mechanism ALSO violates the Constitution.
(4). The remedy for the HERA funding Appropriations Violation is invalidation of the NWS.
A long uncertain journey indeed.
Now, throw in the possibility that the federal government finally throws in a "compromise" offer on the courthouse steps as the parties enter the courtroom and the Plaintiffs agree to drop their Litigation in return.
Amy Howe: "Review is warranted, the CFPB contended, because the lower court’s ruling “calls into question virtually every action the CFPB has taken in the 12 years since it was created” and, as a result, “threatens to inflict immense legal and practical harms on the CFPB, consumers, and the Nation’s financial sector.” The CFPB urged the justices to take up the case during the 2022-23 term, so that they could issue a decision before their summer recess.
The challengers countered that if the CFPB were correct about Congress’s powers under the appropriations clause, “a single Congress could effectively nullify the Clause by passing a law authorizing the Executive Branch to spend as much public funds as desired in perpetuity for virtually any purpose, unless and until a future Congress could overcome a Presidential veto to retake its power over the purse.” The groups downplayed the CFPB’s concerns about the effect of leaving the 5th Circuit’s decision in place, noting that the ruling below “simply vacated a single regulation that has never been in effect.”
In a brief order on Monday, the justices agreed to review the CFPB’s appeal but declined to fast-track the proceeding."
https://www.scotusblog.com/2023/02/supreme-court-will-review-constitutionality-of-consumer-watchdog-agencys-funding-cfpb/
"But the Supreme Court also said that it will hear arguments in the case during its next term, which starts in October, not during the current term as the Biden administration had requested. That means a final decision in the case could be delayed until June 2024.
Sen. Elizabeth Warren, D-Mass., who first proposed the creation of the CFPB, in a statement, said, "Despite years of desperate attacks from Republicans and corporate lobbyists, the constitutionality of the CFPB and its funding structure have been upheld time and time again."
"If the Supreme Court follows more than a century of law and historical precedent, it will strike down the Fifth Circuit's decision before it throws our financial markets and economy into chaos," Warren said.
But a lawyer for the two payday-lending advocacy groups that are the plaintiffs in the case said the court's decision to hear the dispute "reflects the importance of the separation-of-powers issues at stake in this case."
"As we have demonstrated, and the Fifth Circuit Court of Appeals has held, the CFPB's self-funding mechanism lacks any contemporary or historical precedent, improperly shields the agency from congressional oversight and accountability, and unconstitutionally strips Congress of its power of the purse under the Appropriations Clause of the Constitution," said the attorney, Christian Vergonis, of the law firm Jones Day.
Vergonis said that his clients, the Community Financial Services Association of America and Consumer Service Alliance of Texas, "look forward to presenting these arguments to the Supreme Court."
The private government watchdog group Accountable.US, in a statement, called the lawsuit by the payday plaintiffs "baseless," and said it is "the crown jewel in a long-running, highly organized effort by greedy industries and right-wing politicians in their pocket to take out the CFPB because it works so well to protect consumers from abuse."
"It's apt that predatory lenders are leading this latest assault as no industry has a bigger ax to grind against the CFPB after facing numerous fines for mistreating consumers," said Liz Zelnick, Accountable.US's director of economic security and corporate power.
The Supreme Court in a 2020 ruling allowed the CFPB to continue operating but also said that a provision of the law that created the agency was unconstitutional because it violated the separation of powers rule.
That provision had said that the director of the CFPB could be removed from that position "only for cause."
The court, in its 5-4 ruling that year, said that the director must be removable by the will of the president, for any reason.
Since its creation in 2010, the CFPB has recovered more than $15 billion for customers."
https://www.google.com/amp/s/www.cnbc.com/amp/2023/02/27/supreme-court-will-hear-case-challenging-consumer-financial-protection-bureau-funding.html
"But the Fifth Circuit's ruling opened the door for the bureau's 12-year history of rules and enforcement actions to be challenged.
While the high court considers the case, the CFPB faces challenges to its regulatory and enforcement actions. The case is the second constitutional challenge to the CFPB in five years."
"Many experts think any Supreme Court decision will lead to a fight in Congress over the CFPB's future funding. Though some banks and financial institutions want the CFPB to be abolished outright, many others are hoping for a ruling that would force Democratic lawmakers to bow to reforms, including funding the agency through congressional appropriations and adopting a five-member commission structure instead of a single director with full authority.
Republicans intend to bring "the unaccountable CFPB under the annual appropriations process," House Financial Services Committee Chairman Patrick McHenry, R-N.C., said in a news release Monday. "As Republicans have said for years, the CFPB's unconstitutional funding structure improperly insulates it from Americans' representatives in Congress."
Many agencies including the U.S. Postal Service and U.S. Mint are funded from sources other than annual appropriations. Federal banking regulators — including the Office of Comptroller of the Currency and Federal Deposit Insurance Corp. — are funded through fees or assessments imposed on financial firms, while the Fed is funded through its own open market operations. When Dodd-Frank was being written, financial firms objected to the CFPB being funded through fees or assessments, experts said.
The case plays to many of the concerns of the current Supreme Court and a decadeslong push backed by many industries to undercut the powers of federal agencies. Much of American administrative law has rested upon a legal principle known as "Chevron deference," a doctrine borne of a 1984 U.S. Supreme Court case that granted federal agencies a wide berth in interpreting ambiguous congressional statutes. "
https://www.americanbanker.com/news/supreme-court-agrees-to-take-cfpb-constitutionality-case
Wow! Could be "yuge" or another nothing burger. Stay tuned as the drama continues on the "Days of our CONservatorship Lives" continuing for its upcoming record breaking 15TH YEAR!
Right, IF the Exit from conservatorship is tomorrow.
But what EXACTLY will ANY current or future Litigation, federal government policy, and/or reactions from the market have on the seniors?
That's right, that's why it's important according to the Amicus Brief filed by the US Chamber of Commerce for the court to provide more bright lines for when and when the MQD is appropriate.
So, what do you think? Is the $400B student loan forgiveness a valid grant of power from the US Congress in the HEROES ACT and not Constitutionally permissible under the MQD or is it?
The Presidents will continue utilizing their federal agencies and using EO's to stretch their power to accomplish actions and policy that would never make it through the peoples elected representatives in Congress.
That's why the MQD can draw bright lines by putting this POTUS and ALL FUTURE Presidents on notice that if they continue their governmental overreach into the Legislative Branch, the Judicial Branch is likely to strike it down.
Let's see if the Supremes even talk about it tomorrow morning, STANDING will take up a lot of time but hopefully they will ask some MQD questions and draw brighter lines in their eventual decision this Summer.
Elizabeth and Elena don't want them to impede the power of their precious little federal agencies, from todays WSJ:
""Special canons like the 'major questions doctrine' magically appear as get-out-of-text-free cards," Justice Elena Kagan wrote in a dissent in the EPA case. The conservatives use it to "prevent agencies from doing important work, even though that is what Congress directed," she wrote."
"This Supreme Court has shown that it is trying to take power away from Congress and away from the administration and pull it in toward itself," Sen. Elizabeth Warren (D., Mass.) said in an interview. Ms. Warren pointed out that a co-sponsor of the 2003 Heroes Act, former Rep. George Miller (D., Calif.), filed a brief in the case saying the law was intended to permit student-loan debt cancellation."
If the federal government eventually wants to end the conservatorships they will have to make some choices.
First, let's see how the current and future litigation resolves itself before proposing all these "what if" scenarios. We will all be able to make better guesses then, don't you agree?
Presupposing various legal outcomes, governmental policy actions, and reactions from the markets that are just currently unknown and their JPS centric outcomes may or may not come to fruition.
Rodney, this is the very first paragraph of the 2022 Fannie Mae Annual Report filed with the SEC (i. e., the 10-K), the board, management, and the shareholders are powerless and its been that way for 14.5 years, next March 08, 2023 (I added bold):
"We have been under conservatorship, with the Federal Housing Finance Agency (“FHFA”) acting as conservator,
since September 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the
company, and of any shareholder, officer or director of the company with respect to the company and its assets.
The conservator has since provided for the exercise of certain functions and authorities by our Board of Directors.
Our directors owe their fiduciary duties of care and loyalty solely to the conservator. Thus, while we are in
conservatorship, the Board has no fiduciary duties to the company or its stockholders."
The 3rd Amendment or NWS amended or legally changed the 10% or 12% dividends paid each quarter.
The dividends paid after the 3rd Amendment was signed by the UST and the FHFA were changed to all the profits each quarter and if no profits, then the GSES don't owe dividends that quarter.
THE PROBLEM: The FHFA appointed CEOs failed by sending the NWS payments to the Treasury without the terms of the Pay Down of the Liquidation Preference applied.
Todays WSJ: "Justice Brett Kavanaugh, speaking in January at Notre Dame Law School, said Congress needs to have clearly delegated authority to an agency before it is allowed to resolve a major question through massive or expensive new regulation. "We think that's rooted, again, both in constitutional values and also in our understanding of how Congress operates," he said.
References to the major-questions principle have become more common since Justice Neil Gorsuch joined the court in 2017. In a January 2022 concurring opinion, he explained it as requiring agencies to show "clear congressional authorization" when they claim the power to make decisions of vast "economic and political significance." The term appeared in a majority opinion for the first time in June, when the court limited the EPA's authority to combat greenhouse gases.
Liberal members of the high court have called the principle vague, and said their conservative colleagues coined the major-questions doctrine to stymie progressive policies even though the text of the Constitution itself places no such barriers on the elected branches.
"Special canons like the 'major questions doctrine' magically appear as get-out-of-text-free cards," Justice Elena Kagan wrote in a dissent in the EPA case. The conservatives use it to "prevent agencies from doing important work, even though that is what Congress directed," she wrote.
Supporters of the student-debt plan argue Mr. Biden's actions are well within the administration's legal authority and say conservatives on the court are holding policies with which they disagree politically to an unreasonable standard.
"This Supreme Court has shown that it is trying to take power away from Congress and away from the administration and pull it in toward itself," Sen. Elizabeth Warren (D., Mass.) said in an interview. Ms. Warren pointed out that a co-sponsor of the 2003 Heroes Act, former Rep. George Miller (D., Calif.), filed a brief in the case saying the law was intended to permit student-loan debt cancellation."
Was not the FHFA head position found unconstitutional? Why is there still a single director position? Why has congress not corrected what the courts pointed out!
The SCOTUS in Collins said that the NWS was STATUTORILY PERMISSIBLE under the Incidental Powers of HERA, right?
Here's the piece of the puzzle that you are missing - an agency action can be statutorily permissible (like the NWS) but that same statutorily permissible action (like the NWS), can be invalidated as a violation of the Seperation of Powers or the MQD or any other Constitutional reasons.
That's why Collins was remanded to the trial court to determine if the Constitutional Violation in HERA resulted in any damages to the shareholders.
The Collins decision was NOT saying that the NWS survives all Constitutional Challenges and complies with the US Constitution.
Justice Stephen Breyer, is the one who came up with the term, "Major Questions Doctrine", and wrote an influential and important article about it during his 40 years on the bench:
"And yet, the major questions doctrine takes its name from Breyer’s own writing. When he was a judge on the U.S. Court of Appeals for the First Circuit, he wrote an article in which he advocated softening Chevron’s command that courts defer to agencies.5 Then-Judge Breyer argued that, before deferring to an agency’s statutory interpretation, courts should “ask whether the legal question is an important one.”6 As he explained, “Congress is more likely to have focused upon, and answered, major questions, while leaving interstitial matters to answer themselves in the course of the statute’s daily administration.”7 The Supreme Court agreed and cited his article in Brown & Williamson to support its decision not to defer to the Food and Drug Administration’s (FDA’s) judgment that the Food, Drug & Cosmetics Act allowed it to regulate tobacco.8"
https://www.yalelawjournal.org/forum/deference-delegation-and-divination
It's been a big problem lately, Trump did it with the CDC Eviction Moratorium, the wall funding, JB with vaccine mandates, Obama to fund health insurers from the US Treasury under Obamacare, even Bush did it.
The granddaddy of them all will be the $400B student loan forgiveness if the POTUS gets away with it.
What's to stop future Presidents from bypassing the peoples elected representatives in Congress whenever he needs to throw some red meat to his targeted political base and commands one of his hundreds of federal agencies in DC to find a vague Statute and stretch it and get whatever he wants?
Next Tuesday during oral arguments, the Supremes may talk a lot about Standing, but let's hope they shed some more light on the Seperation of Powers and the Major Questions Doctrine.
These federal agencies have gotten out of control. The fundamental problem is (1) Congress delegates fuzzy legislative commands (let the Unelected Bureaucrats in DC make the politically hard decisions instead of the US Congress), like, "in the best interests of the FHFA" and (2) the courts giving Chevron Defence to the Unelected Bureaucrats to interpret these fuzzy legislative commands practically anyway they wish.
With the POTUS in direct control of most of these federal agencies, he tells them to find a vague Statute and do something like forgive $400B in student loans.
Crazy stuff!
The SCOTUS seems ready to rein it in via the revival of the MQD and Seperation of Powers Doctrine. Oral arguments are set for next Tuesday morning. Should be a good listen.
The federal agencies are Constitutionally not allowed to be used as a means to an end for the POTUS to spend money on his pet projects that he otherwise can't get through our elected representatives in Congress.
That's likely what the administrators in the current administration (and hopefully all future administrations) will learn from the student loan forgiveness cases set for oral arguments next Tuesday, February 28th.
TH today: "...; by moving the string completely away from the specific and informative to a vague “word jumble,” it obfuscates, rather than clarifies or challenges, the original points that were made. That’s not what I want on this blog.
A word about the term “restructuring.” The drawback to using it with respect to Fannie and Freddie is that it’s too general, to the detriment of clarity. A typical financial restructuring involves the reorganization of debt, which obviously isn’t the companies’ problem. And even saying they need an “equity restructuring” is still unnecessarily general. Fannie and Freddie’s equity problems are literally unique: they have $193.5 billion in Treasury senior preferred stock that does not count as regulatory capital, that they were forced into taking because of non-cash expenses put on their books between the middle of 2008 and the end of 2011 by FHFA, and that they cannot repay (as Fannie reiterated in its 2022 10K), and Treasury also has a liquidation preference in them of $288.2 billion as of December 31, 2022, which will grow in every future quarter until it is eliminated. Since THAT’s their “equity problem,” why not just call it that? And it’s a problem only Treasury can fix.
One also might argue that Fannie and Freddie junior preferred stock are candidates for “restructuring,” but that’s in a very different category from the senior preferred and the liquidation preference. Those have to be eliminated first, before it makes sense to think about redeeming (or converting) the junior preferred and replacing it with some other form of equity. Moreover, I would argue that changing the amount, type or mix of junior preferred stock is a decision properly made by company management, in conjunction with their financial advisers, and not FHFA."
Statutory power cannot be treated as a single line item that nullifies all other practical aspects as to what the agency is charged to do before exercising that power, or what other liabilities had to be discharged before acting on that power.
Yes, if a federal Judge decides it's a major question of economic and political importance, they can skip the Chevron Defence and go straight to invalidation of the federal agency action if they believe it is an MQD or let it stand if they don't.
Well, that's probably why the courts loved the Chevron Defence, in that landmark case, the USSCT said we will let these "administrative specialists" decide what their statutes mean. This effectively reduced the ability of the citizens and their businesses from challenging the decisions of the 100's of federal agencies here mostly in DC.
Last week, Justice Kagan (a 'yuge' advocate of the Administrative State) in the Section 230 Internet Shield Statute case stated, “These are not, like, the nine greatest experts on the internet,”.
But several cases have emerged over the previous decades where the USSCT stepped in and said basically, "No we are invalidating the federal agency action because that decision is reserved EXCLUSIVELY for the peoples ELECTED REPRESENTATIVES IN CONGRESS."
These early cases subsequently became known as the Major Questions Doctrine (MQD) and last Summer, Justice Gorsuch was kind enough to list its necessary elements in WV v EPA.
The courts move at glacial speeds...
Do you really think the US Congress meant to give DeMarco (one Unelected Bureaucrat in DC) the power to determine the future of the US Secondary Mortgage Market via an INCIDENTAL POWER in HERA to act, "in the FHFA's best interests and by extension the public it serves"?
Or did the US Congress command him via HERA to preserve and conserve the assets of the GSES in what they likely thought (and the FHFA originally stated) would be a temporary conservatorship or receivership.
The Constitutional problem may be where the Congress allows the federal agency perpetual funding, lets the federal agency (i.e., the Executive Branch) set its own annual operating budget so long as it is "reasonable", and then obtains those funds almost completely from 2 private corporations that it controls.
Where's the Congressional Appropriations Oversight Process?
The Drafters of the US Constitution saw the King doing this. Pre 1776, the British Parliament in theory controlled the countries purse strings. But the King, whenever he needed some money for his latest pet project, simply had his Executive Branch (which he controlled) extract the funds from the people and their businesses that he controlled.
"The Sword and the purse in the same hand is asking for tyranny." James Madison, Alexander Hamilton and others therefore put this Clause in the US Constitution:
"“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
— U.S. Constitution, Article I, section 9, clause 7
https://history.house.gov/institution/origins-development/power-of-the-purse/#:~:text=%E2%80%94%20U.S.%20Constitution%2C%20Article%20I%2C,published%20from%20time%20to%20time.%E2%80%9D
Compatible with the US Constitution or not?
Let's get some black robes to decide, right?
I added bold, "...by moving the string completely away from the specific and informative to a vague “word jumble,” it obfuscates, rather than clarifies or challenges, the original points that were made. That’s not what I want on this blog.
A word about the term “restructuring.” The drawback to using it with respect to Fannie and Freddie is that it’s too general, to the detriment of clarity. A typical financial restructuring involves the reorganization of debt, which obviously isn’t the companies’ problem. And even saying they need an “equity restructuring” is still unnecessarily general. Fannie and Freddie’s equity problems are literally unique: they have $193.5 billion in Treasury senior preferred stock that does not count as regulatory capital, that they were forced into taking because of non-cash expenses put on their books between the middle of 2008 and the end of 2011 by FHFA, and that they cannot repay (as Fannie reiterated in its 2022 10K), and Treasury also has a liquidation preference in them of $288.2 billion as of December 31, 2022, which will grow in every future quarter until it is eliminated. Since THAT’s their “equity problem,” why not just call it that? And it’s a problem only Treasury can fix.
One also might argue that Fannie and Freddie junior preferred stock are candidates for “restructuring,” but that’s in a very different category from the senior preferred and the liquidation preference. Those have to be eliminated first, before it makes sense to think about redeeming (or converting) the junior preferred and replacing it with some other form of equity. Moreover, I would argue that changing the amount, type or mix of junior preferred stock is a decision properly made by company management, in conjunction with their financial advisers, and not FHFA."
How many bankruptcy reorgs did you do where the Conservator took $300B+ in NET PROFITS for itself IN RETURN FOR NOTHING, thus depleting nearly ALL their wards capital?
I get it, dilution solution, instant recap, and administrative bankruptcy. You got anything else?
How come you never bring up the subject of the 20%+ intraday price volatility between the almost 40 different series of JPS stock?
Yesterday it was more than 40%....
https://finance.yahoo.com/quotes/fmcc,fnma,fmckj,fmcki,fmccm,fmcck,fmcct,fmcci,fmckk,fmccg,fmcch,fmccl,fmccn,fmcco,fmccp,fmccj,fregp,fmckp,fmccs,fmcko,fmckm,fmckn,fmckl,fnmap,fnmao,fnmfo,fnmam,fnmag,fnman,fnmal,fnmak,fnmah,fnmai,fnmaj,fnmas,fnmat,fnmfm,fnmfn/view/v1
See, no analogous bankruptcy reorgs is there?
what matters is if they have the adequate capital buffer as required by law
And? And the government took 92% of AIG. They could easily do the same here but IMO they will take more.
The magical charter you keep referring to will not save you.
The litigation will go away
Why don't you give us an analogous example of the NWS and a bankruptcy reorg where two profitable enterprises with quarterly income in the billions were restructured.
A lot of people have compared AIG to Fannie Mae and Freddie Mac.
Maybe the GM bankruptcy? But that was not a government sponsored enterprise with a special Charter from Congress to be the backbone of the US Secondary Mortgage Market was it?
MC said this was an administrative bankruptcy and that all the litigation will go away.
The litigation is still going but MC's not.
Do they really want to let a POTUS interpret a statute based on political opportunism?
Why doesn't the MQD apply to the NWS? Isn't the NWS (i.e., when a conservator agrees to give away all their wards future profits into perpetuity thus making sure that they never go private again) an act by a federal agency to Nationalize the 2 lynchpins of the US Secondary Mortgage Market in the US?
Wouldn't that be a question exclusively reserved for our elected officials in the US Congress?
During testimony at the Lamberth trial, DeMarco said that he also implemented the August 17, 2012 NWS to, "let Congress fix the broken system".
Does HERA specifically command the FHFA Director to decide such a Major Economic and Political Question based on an Incidental Power to act in the best interests of the FHFA and by extension the public it serves?
"Michael McConnell: Most of the briefs, including the respondents’ brief, rely on what is called the “major questions doctrine.” This is a new and highly controversial idea, and it means that if there is a major issue before the government (such as student loan forgiveness), then the courts should depart from its ordinary principles of statutory construction and of the non-delegation doctrine. This reasoning has become more common in the federal judiciary in the last few years. It may be right, but it is something on which serious people disagree."
https://law.stanford.edu/2023/02/24/qa-senior-fellows-john-f-cogan-and-michael-mcconnell-on-their-new-amicus-brief-opposing-the-student-loan-forgiveness-program/
"The major questions doctrine is an outgrowth of an approach favored by many conservatives and business groups to curb what they call the excesses of the "administrative state." They object to what they see as accumulated power by the U.S. government's executive branch without proper checks by the courts and Congress.
The conservative justices already have shown skepticism toward giving deference to federal agency decisions.
"It now looms over any big agency action that the administration wants to do," University of San Diego law professor Mila Sohoni said of the major questions doctrine. "The doctrine allows courts a great deal of leeway to pick and choose which agency actions to strike down and which to sustain.""
https://www.reuters.com/world/us/us-supreme-courts-major-questions-test-may-doom-biden-student-debt-plan-2023-02-23/
"The major questions doctrine has surfaced in Supreme Court decisions since 1994, according to a Congressional Research Service report issued last year.
But the Supreme Court’s conservative majority expressly referenced the doctrine for the first time in a decision last term, which found that the EPA did not have the authority to address the major question of greenhouse gas emissions under current law.
Steven Schwinn, a law professor at the University of Illinois Chicago, said the Supreme Court in these cases may expand the doctrine to agency actions outside of rule-making."
https://rollcall.com/2023/02/24/republicans-argue-biden-student-debt-program-is-major-question/
"West Virginia is “another example of how administrative law is being taken over by environmental law,” said Cruden, who worked at the Justice Department’s environment division under Democratic and Republican administrations and led it under former President Barack Obama. “It’s going to be an often-cited case, but the boundaries of this are hardly certain.”
The Supreme Court may soon have the chance to more clearly define the doctrine in an upcoming battle over President Joe Biden’s student debt relief plan or in other regulatory cases that are currently making their way through the lower courts.
For now, said Cruden, figuring out when to apply the major questions doctrine is a bit like former Supreme Court Justice Potter Stewart’s infamous threshold test for obscenity: “I know it when I see it.”"
https://www.eenews.net/articles/scotus-stocks-docket-with-blockbuster-regulatory-battles/
Nice! "The agency, created four-and-a-half years ago, has never had its own director confirmed by the Senate."
"After all, the FHFA is the main federal regulator overseeing housing policy, and whoever runs it will have a major impact on home ownership, mortgage lending, and the future of Fannie Mae and Freddie Mac, the two mortgage giants in federal conservatorship."
That's right, DeMarco was from OFHEO, and was never nominated and thus never even considered by the Senate.
Apparently, DeMarco upset the Progressives in Obama's party, because he wouldn't do mortgage forgiveness and Mel Watt was eventually appointed and Senate confirmed.
Do you remember if Mel Watt considered mortgage forgiveness and also rejected the idea?
Anyone know if DeMarco was appointed but denied Senate Confirmation?
Here's an Amicus Brief filed by the ACLJ, and it shows how the MQD applies in the student loan forgiveness case set for arguments next Tuesday at the SCOTUS and answers WHY the lower court ruling on applying the MQD was correct:
http://www.supremecourt.gov/DocketPDF/22/22-506/253883/20230203100721726_22-506%20Amicus%20Brief%20of%20American%20Center%20for%20Law%20and%20Justice.pdf
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ....................................... ii
INTEREST OF AMICUS ............................................ 1
SUMMARY OF THE ARGUMENT ............................ 2
ARGUMENT ............................................................... 4
I. The Secretary of Education, Miguel Cardona’s
Twisting of the HEROES Act Violates Separation
of Powers, Which Prevents the Executive Branch
from Dictating National Policy by Administrative
Fiat. ........................................................................ 5
II. The Secretary of Education, Miguel Cardona’s
Distorted Reading of the HEROES Act Also
Violates the Major Questions Doctrine. ................ 7
A. The HEROES Act Has a Noble But Limited
Purpose that Does Not Clearly Authorize the
Secretary’s Program. ........................................ 8
B. Democrat Leaders in Congress and Then-
Candidate Biden Conceded that Loan
Forgiveness Is an Issue of Immense Economic
and Political Significance that Congress Alone
May Regulate. ................................................. 15
CONCLUSION .......................................................... 21
"The Framers would be “rubbing their eyes” in
disbelief at these brazen trespasses against Article I
limits. City of Arlington v. FCC, 569 U.S. 290, 313
(2013) (Roberts, C.J., dissenting). The laws
governing Americans are increasingly “nothing more
than the will of the current President.” Stephen
Breyer, Making Our Democracy Work: A Judge’s View 110 (2010); see also The Federalist No. 47, at
303 (James Madison) (Clinton Rossiter ed., 1961)
(“When the legislative and executive powers are
united in the same person or body, there can be no
liberty. . . .”).
The Secretary’s discovery in the HEROES Act of
Executive authority to forgive hundreds of billions of
dollars in federal student loans is another such
encroachment on Congress’s legislative powers."
The Pacific Legal Foundation's latest news article, on the MQD:
"In the vaccine mandate case, National Federation of Independent Business v. OSHA, the court wrote, it “expect[s] Congress to speak clearly when authorizing an agency to exercise powers of vast economic and political significance.” Such clarity was lacking from the statute the Biden administration relied on to mandate vaccination of 84 million Americans. In West Virginia v. EPA, the court elaborated that when the executive branch asserts a “transformative expansion” of regulatory authority, it cannot be through “implicit delegation[,]” “modest words,” or “vague terms.” "
Like when a federal agency Nationalizes the 2 lynchpins of the US Secondary Mortgage Markets?
https://www.scotusblog.com/2023/02/when-the-president-takes-lawmaking-matters-into-his-own-hands-the-court-must-step-in/
SYMPOSIUM
When the president takes lawmaking matters into his own hands, the court must step in
By Elizabeth Slattery
on Feb 23, 2023 at 9:59 am
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person standing in front of the court steps
This article is part of a symposium on the upcoming arguments in Biden v. Nebraska and Department of Education v. Brown. A preview of the cases is here.
Elizabeth Slattery is a senior legal fellow at Pacific Legal Foundation, a nonprofit legal organization that defends Americans’ individual liberty and constitutional rights. She’s also the co-host of Dissed, a podcast about the Supreme Court.
Every presidential administration reaches a point where the president is tempted to take lawmaking matters into his own hands. “I’ve got a pen and I’ve got a phone,” Barack Obama famously put it. Frustrated by a Congress that can’t or won’t accede to their preferred policies, presidents turn to executive orders and executive agencies to achieve their goals. Although the motive might be characterized as a president’s impatience with the political process or dissatisfaction with likely compromises, our history books are filled with instances of presidents acting unilaterally — Harry Truman’s seizure of the nation’s steel mills during the Korean War, Richard Nixon’s attempt to impound congressionally appropriated funds, and Abraham Lincoln’s wartime suspension of the writ of habeas corpus.
More recently, after Congress refused to appropriate funds for construction of a border wall, Donald Trump declared a national emergency to divert $6 billion in military spending for the project. He also ordered a nationwide eviction moratorium early in the COVID-19 pandemic, which was later extended by Joe Biden. Similarly, with the stroke of a pen, Obama implemented an amnesty plan for more than 800,000 Dreamers and attempted to restructure the nation’s energy sector with his Environmental Protection Agency’s Clean Power Plan. Throughout history, the courts have played a crucial role of enforcing the separation of powers when presidents overstep their constitutionally assigned duty and assume the role of legislator.
Biden, like his predecessors, struck out on his own last summer when his administration announced a new student-loan cancellation program: up to $20,000 of federally held debt wiped out for borrowers who earn less than $125,000. Like Obama’s Clean Power Plan, the Trump-Biden eviction moratorium, and Biden’s vaccine mandate, the loan-cancellation plan rests on dubious legal ground. The Biden administration located a previously untapped source of authority in the HEROES Act of 2003, a law passed in the early days of the Iraq War to temporarily freeze student loans held by servicemembers and their families during times of war or national emergency. The law was intended to ease certain bureaucratic burdens (for example, by extending grace periods and waiving documentation requirements) so servicemembers and their families would not be placed in a worse financial position because of a deployment.
The statutory language, however, is not limited to servicemembers and their families. It allows the secretary of education to waive or modify student-loan requirements for those residing or working in a disaster area related to a war or national emergency who would otherwise be in a worse position financially. The Biden administration says this applies to every person in the United States with an eligible student loan and relies on the COVID-19 pandemic as the national emergency to justify its action. And despite Biden’s remark just weeks after announcing this plan that “the pandemic is over” and the White House’s recent announcement that the national emergency will formally expire on May 11, the administration presses on with this legal pretext.
The plan was rolled out via a handful of press releases, a fact sheet, and two memos — without the standard rulemaking procedure that includes providing notice of a draft rule and giving affected individuals the opportunity to comment on it. Soon after, the plan was challenged in court by states that service federally funded student loans, a borrower who would automatically receive loan cancellation but face a hefty state tax bill, and other borrowers who did not qualify for loan cancellation.
The Biden administration quickly revised its plan to try to avoid judicial scrutiny. It was successful in one case, Garrison v. Department of Education (brought by my colleagues at Pacific Legal Foundation). In response to a question about the forthcoming automatic cancellation for nearly eight million borrowers, White House Press Secretary Karine Jean-Pierre announced that borrowers simply could “opt out” of the program. Though the Education Department website said otherwise, it was quickly edited to fit the administration’s new spin. A federal district judge then dismissed the suit for lack of standing. Just as the Biden administration hopes to wave a wand and wipe out half a trillion dollars in debt, it waved a wand to eliminate one legal challenge (at least for now; the case is on appeal to the U.S. Court of Appeals for the 7th Circuit). The administration was unsuccessful in its attempt to do the same to the states’ suit.
Now two cases are before the Supreme Court.
The Biden administration’s reading of the HEROES Act follows the same playbook as its defense of the eviction moratorium, vaccine mandate, and Clean Power Plan: Stretch a modest grant of power to reach policy goals Congress never approved. As the court explained in its per curiam opinion in the eviction moratorium case, Alabama Association of Realtors v. HHS, “It would be one thing if Congress had specifically authorized the action that the CDC has taken. But that has not happened. Instead, the CDC has imposed a nationwide moratorium on evictions in reliance on a decades-old statute that authorizes it to implement measures like fumigation and pest extermination. It strains credulity to believe that this statute grants the CDC the sweeping authority that it asserts.”
In the vaccine mandate case, National Federation of Independent Business v. OSHA, the court wrote, it “expect[s] Congress to speak clearly when authorizing an agency to exercise powers of vast economic and political significance.” Such clarity was lacking from the statute the Biden administration relied on to mandate vaccination of 84 million Americans. In West Virginia v. EPA, the court elaborated that when the executive branch asserts a “transformative expansion” of regulatory authority, it cannot be through “implicit delegation[,]” “modest words,” or “vague terms.” The executive branch’s discovery in “a long-extant statute an unheralded power” should be viewed with a healthy dose of skepticism — especially when it allows an agency “to adopt a regulatory program that Congress had conspicuously and repeatedly declined to enact itself.”
As in these recent cases, it “strains credulity” to believe the HEROES Act sweeps as broadly as the administration claims. Pacific Legal Foundation’s amicus brief on behalf of the original authors of the bill explains that Congress did not clearly empower the executive branch to cancel half a trillion dollars in federally held student loans, especially not for the type of waning health emergency that existed last summer. Congress authorized waiver or modification of loan requirements in the HEROES Act, not discharge, forgiveness, or cancellation — the language used in other loan-cancellation statutes like the one creating the Public Service Loan Forgiveness program.
Both the Trump and Biden administrations relied on the HEROES Act to temporarily pause repayment and accrual of interest on federally held student loans in response to the COVID-19 pandemic. And in January 2021, the Education Department’s general counsel issued a memorandum concluding that the HEROES Act did not grant the secretary authority to cancel loans or materially modify repayment amounts or terms. Thus, until last summer, the HEROES Act had never been used to cancel loans. This is precisely the sort of “pouring new wine from old bottles” that the Supreme Court has rejected in recent cases.
How to address the ballooning cost of higher education and what — if anything — the government should do about the estimated $1.75 trillion in student debt is a controversial and fiercely debated topic. The Biden plan arbitrarily caps eligibility based on borrowers’ income level and would cancel a blanket amount of $20,000 for Pell Grant recipients and $10,000 for all other eligible borrowers. Perhaps Congress would have chosen differently with respect to the amount of any cancellation, income requirement, and other eligibility factors. That debate belongs with the people’s representatives in Congress, not the president and Department of Education. The Supreme Court should ensure that remains the case.
Posted in Symposium before oral arguments in Biden v. Nebraska & Dept. of Education v. Brown, Featured
Cases: Department of Education v. Brown, Biden v. Nebraska