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The USSCT just denied the Takings Case Petition for a Writ of Certerrori about 1 week ago.
Under which legal theory do you suggest challenging the Nationalization?
I'm pretty sure under HERA, the FHFA has the final say as to any dividends paid out by the GSES not the corporations ceo's or cfo's.
The government certainly made a mess of the GSES conservatorships when they decided to do the Net Worth Swipe on August 17, 2012.
Wonder if some of those classified documents are about the NWS?
Todays WP: "The Justice Department on Friday completed an extensive search of President Biden's home in Wilmington, Del., and turned up additional classified documents, some of which date to his time in the Senate and others from his eight-year tenure as vice president, the president's personal attorney announced Saturday night.
After being given full access to Biden's home - including to personally handwritten notes, files, papers and binders that covered decades of his work - the Justice Department took possession of six items. Those items, according to the president's personal attorney Bob Bauer, consisted of "documents with classification markings and surrounding materials."
The Justice Department also took some of Biden's handwritten notes from his vice-presidential years to further review them."
Steve Mnuchin was the Treasurer of the United States Treasury. He and MC could have in theory released the GSES but in the end he changed his mind.
All previous FDIC takeovers of banks were relatively quick and temporary. SLT even said that at her confirmation hearing.
Most banks ARE NOT vital lynchpins of the American Secondary Mortgage Market.
What's especially pernicious and troubling about the NWS is the over $100B in profits swept into the Treasury's coffers from the GSES balance sheets in 2013 alone.
Seems outlandish to me, but 1/2 the Jury thought it was okay and so did 9 Justices.
They're still peddling just 3 main theories: (1) instant recap (2) the dilution solution and (3) bankruptcy reorg.
MAYBE something big is going on in the administration but even after SM told Maria, "We've got to get them out of government control" it's hard for me to believe it given all the obstacles to an administrative solution.
TH today: "If Klain does leave, I would view that as a setback for the chances of a change in the Biden administration’s policy towards Fannie and Freddie in the near term, and perhaps for the full second half of the President’s first (and possibly only) four-year term.
A Chief of Staff does not make policy, but he (or she) does help the President and his senior leadership achieve a consensus on what the most important policies to pursue are, and then how to implement them effectively. What’s wrong with Fannie and Freddie now is that they are on Treasury and FHFA “institutional auto-pilot,” heading in a non-sensical direction that is doing great harm to a key constituency of the Democratic party, low- and moderate-income homebuyers. As I’ve been saying for some time, to fix that will require some senior member of the Biden economic team to step up and make thoughtful secondary mortgage market reform a high personal priority. I wasn’t thinking that Ron Klain would be that person, but he certainly could have been a big help in making a change in policy toward Fannie and Freddie successful. As a former senior advisor to Fannie’s Office of the Chairman (of which I was a member for the last five years I was there), Klain knew the company and its business in a way that very few in government do. And of course he had great credibility and clout among Biden’s senior economic policy team, and with the President himself. We’ll have to see who Biden picks as his next COS (of the names I’ve heard bruited about, the only one I know to have some familiarity with Fannie and Freddie is Steve Ricchetti), but in my view not having Klain in that role will make getting the companies out of conservatorship in the next two years a tougher lift than it already was shaping up to be."
Minnesota may have a right of redemption, I'm not sure. In OUR Takings Case, the lower Appealate Court held that since the federal government could come in and occupy a bank or financial intermediary like the GSES, WE HAVE NO EXCLUSIVE RIGHT TO EXCLUDE OTHERS, since the feds can come in and takeover a financial intermediary.
This appears to be needed to thwart our 5th Amendment Rights, "Nor shall the government take property without compensation."
Will the SCOTUS deny the Pacific Legal Foundation's 94yr old widow because everyone in America owns their house subject to the condition that they will pay their real estate taxes to the local Gubmint and rule that she lost her 5th Amendment Right when she didn't pay her property tax and therefore lost her right to exclude others from her property?
They could do a 1 sentence ruling: "Once the Great Oz has the right to occupy your property you NO LONGER HAVE A TAKINGS CAUSE OF ACTION IN THE USA, ASK THE BELEAGUERED GSE SHAREHOLDERS, so sad, TOO BAD!"
This guy use to work for Fannie Mae, was he the one spearheading the "Secret Plan"?
https://www.cnn.com/2023/01/21/politics/ron-klain-white-house-biden-steps-down/index.html
"He is seen as so influential that Republicans derisively call him a virtual prime minister and Democrats blame him when they are disappointed in a decision."
https://www.nytimes.com/2023/01/21/us/politics/ron-klain-resigning.html
The FHFA during the 14+ year CONservatorships has the unique position in the eyes of businesses and the courts as either acting as the conservator and thus stepping into the shoes of the entities OR acting as a federal government agency Regulator.
Little wonder the FHFA never wants the 14+ year CONservatorships to end, and they could easily keep 100% control over the GSES by keeping them in perpetual conservatorships and continually bypassing the Congressional Appropriations Oversight Process for their operating funds as well as have the GSES balance sheets bankroll the expensive legal defenses of the perpetual conservatorships.
Amerika, my kinda place !
I thought someone was going to come in and clean up the swamp, because apparently this arrangement is "a okay" with the federal courts.
TH on LLPA: "FHFA is just carrying through on what it announced it would do earlier: it’s increasing upfront fees (Loan Level Price Adjustments, or LLPAs) on products or loan features it thinks Fannie and Freddie should be doing less of–such as second homes, investor properties, cash-out refis and even rate-and-term refis–while also lowering LLPAs for features it associates with affordable housing loans. In making these changes, FHFA claims it’s “developing a pricing framework to maintain support for single-family purchase borrowers limited by weal?th or income…fostering capital accumulation, and achieving commercially viable returns on capital.”
FHFA’s not doing any of those things. The biggest change FHFA could (and should) make to help Fannie and Freddie support affordable housing is to get rid of all of the conservatism, minimums, cushions and buffers in their “risk-based” capital standard, which cause them to have to put unnecessarily high guaranty fees on ALL their loans (as I discussed in my August 2022 post, “Mind the Gap”). But Director Thompson won’t do that. Instead, she hopes to achieve a very rough form of cross-subsidization by raising LLPAs on some (mainly lower-risk) loans while lowering them on affordable housing loans.
Aside from the fact that this doesn’t solve the overall pricing problem caused by gross overcapitalization, it’s also likely to LOWER Fannie and Freddie’s returns, because the LLPA cuts on affordable housing loans still leave the total guaranty fees (base guaranty fee plus amortized LLPA) on these loans much higher than warranted by their risk–thus not attracting that much more volume–while the huge jumps in LLPAs for low-risk refi business will drive much of that business to the banks, and may even prompt a restart of the hugely inefficient private-label securitization process. So with Fannie and Freddie doing less lower-risk business at higher fees, and more higher-risk business at lower fees, their overall mix of credit guarantees will shift more to loans that are underpriced relative to the Calabria standard, at the same time as that same standard will require a greater percentage of capital because a significant volume of lower-risk loans will have gone elsewhere. The result will be a lower, not a higher, return on the companies’ “Calabria capital.”
This, unfortunately, is what you get when you have politicized bureaucrats running complex, sophisticated, market-based institutions like Fannie and Freddie: simple solutions that look good–and can be turned into a great press release–but won’t work. And we will likely have to wait until it is “glaringly apparent” that these LLPA changes are NOT doing what Thompson thought they would before FHFA feels compelled to try something different–unless, that is, the Biden administration wakes up to what’s going on and replaces Thompson with someone who understands Fannie and Freddie’s business, and values the role they could play if removed from the straitjackets former Director Calabria put them in."
That's right, and the Pacific Legal Foundation has been SLAM DUNKING the ball in the Supremes court quite a bit!
Imagine, a 94 yr old widow forgot to pay $2k-$3k in county real estate taxes and what does the county do? Why they're the local Gubmint, so they add costs and fees and interest and run up the bill to $15k, sell it at a real estate auction at the county Courthouse for $40k and put the $25k left over into the local Gubmint operating budget.
Amerika, my kinda place !
Great Plaintiff to represent, no? We're just a bunch a bunch of 'evil mortgage banksters'/'hedge fund guys'!
https://pacificlegal.org/case/mn_home_equity_theft/
Don't give up yet Skepi, we might join you with a couple more Phyrric Victory's at the courthouse! This is THE most bizarre drama in American Corporate History I could ever have imagined.
How could a federal agency have SO MUCH unchecked power, FOR SO LONG? And NO ONE GIVES A SH*T, EXCEPT US.
Amerika, my kinda place !
You'll like this from todays WP, the feds are trying that dude (60yr old redneck "crazy Uncle" from Arkansas) who put his feet up on Nancy's desk on Jan. 6th and was memorialized throughout the world with his picture. At the DC federal district where the Lamberth trial was,
"It has always been his "natural" habit to lean back and plunk his feet on a table, at home and at work, Barnett said. He even sat that way during an FBI interview after his arrest. ("Look familiar?" he said to agents.) But this time it altered his future, leaving him chastened.
"Two years of lost life, misery for my family," he said of his legal predicament.
Finishing his direct examination Thursday, McBride again asked Barnett about the now-former House speaker.
"I mean, I can't turn around and quite honestly say I think Nancy Pelosi is a good person," he replied. "But I shouldn't have called her a b----. That's not right."
Judge Thapar's Dissent in Rop is about the Appointments Clause. One way to invalidate the NWS would possibly be to challenge the agency action under Article 1, Section 1 of the US Constitution (i.e., the Appropriations Clause): "All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives."
The CFPB has a Petition for a Writ of Certerrori and the SCOTUS may decide at its conference in mid February.
I'm sure you're familiar with the Appealate Panel Decision in the 5th Circuit.
Why not try this?
BTW, loved this at the end of Judge Thapar's Dissent:
"We have long understood that the Constitution’s structural protections are as important
for individual liberty as amendments like the First or Fourth. But while no jurist would suggest
that Congress and the President can do away with the Bill of Rights or the Fourteenth
Amendment, that’s exactly what the majority proposes to do with the Appointments Clause. The
Constitution’s structural protections are no more ours to give away than the people’s enumerated
rights. Respectfully, I dissent."
Judge Thapar's Dissent in Rop is about the Appointments Clause. One way to invalidate the NWS would possibly be to challenge the agency action under Article 1, Section 1 of the US Constitution (i.e., the Appropriations Clause): "All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives."
The CFPB has a Petition for a Writ of Certerrori and the SCOTUS may decide at its conference in mid February.
I'm sure you're familiar with the Appealate Panel Decision in the 5th Circuit.
Why not try this?
Clearly a healthy dose of skepticism is in order! I know everyone (including me) wants their companies and their money back after 14+ years of these Gubmint shenanigans.
But NONE of my other investments have given me an opportunity to enlighten myself so much about the Administrative State and its massive interference with everyday Americans lives.
Check this out: "Rather than make the Bureau’s funding subject to the give and take of the annual appropriations process, like every other non-entitlement expenditure, Congress decided to put the CFPB’s funding off limits in exchange for surrendering its own future spending power. The Democrat majority in the 111th Congress was at a high-water mark of fifty-nine senators, a dominance not seen since Jimmy Carter lost re-election to Ronald Reagan (and not seen since the 111th Congress, either). A funding mechanism that indefinitely surrenders power to a complicit executive, in order to instantiate the legislative will of a transient majority in Congress—and tie the hands of future congresses—is undoubtedly clever. But it is nonetheless a bargain that the Supreme Court must unwind because it unconstitutionally divests Article I power.
If Title X of Dodd-Frank does supply an “intelligible principle” under current doctrine, then that is a powerful indictment of existing law. No proper interpretation of Article I, § 1 can permit Congress to delegate a core legislative power like the power of the purse.
How Seila Law Makes CFPB’s Nondelegation Problem Worse
If the Court was not already poised to reject the CFPB’s funding structure before, it certainly ought to be in the aftermath of Seila Law. Perhaps unwittingly, the Court’s decision has made the CFPB’s funding regime even less tenable. How? After Seila Law, the president, without input from Congress, is the final authority on the amount of the CFPB’s funding: because the president can now remove the director of the Bureau at will, the director’s preferences in this regard will only matter as much as the president allows.
Hence, by severing the director’s for-cause removal protection, the Supreme Court has put the president more or less directly in charge of over 12 percent of the funds generated by the Federal Reserve each year: more than $650 million in fiscal year 2020. Title X of Dodd-Frank unconstitutionally ceded Congress’s exclusive funding authority to the CFPB. But Seila Law has now changed the law so that it cedes core appropriations power directly to the President of the United States. It would be difficult to construct a more direct violation of the nondelegation doctrine. And remember that the law does not allow the House or Senate Appropriations Committees to review how those funds are spent. If the line-item veto was unconstitutional, then a fortiori turning over this much appropriations control to the president must be unconstitutional too.
To better understand the breathtaking scope of legislative power now ceded the president, consider the following thought experiment: Suppose President Donald Trump instructed the Bureau’s director to request only one dollar for the next quarter of its operations. Could he do that? Nothing in Title X or Seila Law appears to preclude such a move. Congress might object that that sum is less than “reasonably necessary to carry out the authorities of the Bureau under Federal consumer financial law.” But how would Congress enforce such a belief, after having ceded to the director the authority and discretion to decide how much funding to request? Thus, President Trump could cripple the entire agency by unilaterally defunding it. He could not withhold appropriated funds from any other agency due to the Impoundment Control Act. Indeed, his purported violation of that Act in (temporarily) withholding appropriated funds from Ukraine formed the basis of the first article of impeachment lodged against him."
https://lawreviewblog.uchicago.edu/2020/08/27/seila-chenoweth-degrandis/
Even though the referee is paid by Lucy, since the referee has guaranteed lifetime employment with Lucy, eventually the ref will see the violation and tell her to hold the ball and let Charlie kick it or get a place holder that will.
The only way for that to happen is to make sure Lucy has to hold the ball and that's why you bring a lawsuit to court.
Don't give up so easily, it's always best to have the facts on your side and there's no question Lucy needs to be called out in this fact pattern.
"As Collins reaffirmed, this Court applies the vacatur remedy to
the “exercise of power that [a government] actor did
not lawfully possess.” 141 S. Ct. at 1788. And
because the Appropriations Clause is “‘a restriction
upon the disbursing authority of the Executive
department,’” it functions as “a restraint” on the
power possessed by “Executive Branch officers.”
Dep’t of Navy, 665 F.3d at 1347 (quoting Cincinnati
Soap, 301 U.S. at 321). Since “the Bureau lacked
any other means to promulgate the rule” “without its
unconstitutional funding,” Pet.App. 44a, it did not
lawfully possess the power to do so."
Contrary to the Bureau’s contentions, it does not
matter if the agency was statutorily “authorized” to
promulgate the Rule; whether it would have promulgated the Rule if “funded by ‘valid’
appropriations”; or that the Rule’s vacatur will “not
… undo the [agency’s] expenditures” or “restore any
funds to the federal fisc.” Pet. 25-27. The analogous
points could be made in cases challenging actions by
improperly appointed officers, yet vacatur is the
standard remedy in that context. Collins, 141 S. Ct.
at 1788 (citing Lucia v. SEC, 138 S. Ct. 2044, 2055
(2018)); see Cross-Pet. 17-18. Vacatur likewise is the
proper remedy for a regulation promulgated in
violation of the Appropriations Clause. Pet.App. 45a;
All American, 33 F.4th at 242."
Isn't this what you and everyone else wants, to invalidate an agency decision? That's what happened in the 5th Circuit Appealate Panel Decision: "To begin, the Bureau mischaracterizes the Fifth
Circuit’s judgment. The court did not “invalidate”
any part of the statute. Rather, the relief requested
and granted was to vacate the Rule because the
statutory authorization of funding that allowed the
Bureau to promulgate the Rule is unconstitutional.
Pet.App. 46a. Regardless of what “severability
analysis” implies about the Bureau’s funding going
forward under the Act, it cannot retroactively change
that the Bureau promulgated the Rule in 2017 only
by spending funds that were not constitutionally
appropriated under the Act as written.
In addition, the Bureau mischaracterizes the Fifth
Circuit’s reasoning. It suggests the decision may
have turned on ancillary provisions in Section 5497.
See Pet. 24. But the court made clear that those
provisions just “underscore” the flaw inherent in this
“egregious” “funding scheme.” Pet.App. 36a & n.14.
The holding rests on three key features of the
scheme: it is (1) “self-actualizing” and “double-
insulated,” Pet.App. 33a-36a; (2) “perpetual,”
Pet.App. 36a & n.14; and (3) funding a “capacious
portfolio” of executive powers, Pet.App. 37a. Accord
Pet.App. 40a-41a (reiterating these factors, “[t]aken
together”); supra at Part I.B."
"The Fifth Circuit
instead properly applied “the negative power to
disregard an unconstitutional enactment,” Seila
Law, 140 S. Ct. at 2211, holding that Section 5497
did not validly appropriate the funds used by the
Bureau to promulgate the Rule, Pet.App. 44a"
I think we would ALL prefer invalidation of the Net Worth Sweep, but how to get there?
See that's the thing, its known as the Nondelegation Doctrine in the courts. The courts are trying to draw the lines as to what power the Legislative Branch (i.e., US Congress) can send over to the Executive Branch (i.e., a federal agency). The CFPB (and FHFA) enabling statute, the Dodd Frank Act was passed by the 2010 Congress and it (Unconstitutionally?) binds all future US Congresses from reigning in the CFPB via the Appropriations Oversight Process.
The government says that's perfectly okay, mainly because the US Congress can pass a law to change it back. But NOW, Congress CAN'T do that without a 2/3rds Majority if the Executive Branch (i.e., POTUS) VETEOS Congress.
We are still only a roughly 250 year old Republic and these types of issues are still being figured out.
The Potential for Plaintiff Shareholders is WIN/WIN in my mind, a better less tyrannical Executive Branch by bringing the US Congress Appropriations Oversight Process back to having some teeth and a potential invalidation of a federal agency overreach known as the Net Worth Sweep.
HeeeeHeeee! Oh yee of little faith, what happened to your belief in the US Constitution? It's a real document you know!
"This “self-actualizing, perpetual funding
mechanism” is “so egregious” because it operates in
perpetuity. Pet.App. 33a, 36a n.14. That “reverses
the baseline” for appropriations under Article I.
All American, 33 F.4th at 238. Rather than both
chambers of Congress and the President needing to
agree to fund the CFPB each year, the agency can
continue to choose the amount of its own funding
“forever” (up to the illusory cap) “unless prohibited
by Congress” and the President. Id.
Thus, if the people’s representatives try to take
back the power over the CFPB’s purse, the President
or either chamber can unilaterally “veto” that effort.
Id. This inversion of the Appropriations Clause is
analogous to the unconstitutional granting of
legislative power to the President or one chamber
alone. See Clinton v. City of New York, 524 U.S. 417,
447 (1998); INS v. Chadha, 462 U.S. 919, 959 (1983).
Put differently, although “one legislature cannot
abridge the powers of a succeeding legislature,”
Fletcher v. Peck, 10 U.S. (6 Cranch) 87, 135 (1810)
(Marshall, C.J.), “that is exactly what the
masterminds behind the CFPB” were attempting.
All American, 33 F.4th at 239. Congress acted “intentionally to bind its own hands in the future
when political winds change.” Id. at 239 & n.64."
The Skeptics say, "the fix is in" at the SCOTUS. They've already blessed the NWS and said our 5th Amendment Rights are nonexistent.
Will we ever see some Justice here?
Maybe, but I believe that the foundational wisdom of the US Constitution will be upheld in the end, but we've already had no Justice at the Supremes 2x now, and I thought the same thing the last 2 times.
So how do you think it ends for shareholders?
"I am . . . a mortal enemy to arbitrary government and unlimited power. I am naturally very jealous for the rights and liberties of my country; and the least appearance of an encroachment on those invaluable privileges is apt to make my blood boil exceedingly."
Benjamin Franklin
Well, have you EVER asked yourself how could one man (Ed DeMarco an Unelected Bureaucrat who runs a federal agency called the FHFA) could take ALL the Economic Rights from your shares and gave it all into perpetuity to the Treasury for Nothing in return?
How does that make you feel?
Is there any Constitutional safeguards to prevent this from occuring again for future generations (and for ourselves) of Americans?
Inquiring minds would like to know, my friend!
"First, “vesting Congress with control over fiscal
matters” best “ensur[es] transparency and
accountability to the people.” Pet.App. 29a. The
Framers gave the “power over the purse” to the people’s “immediate representatives” in Congress.
THE FEDERALIST NO. 58, at 394 (J. Cooke ed. 1961)
(J. Madison). By making Congress “the guardian” of
“the common fund of all,” 2 Joseph Story,
COMMENTARIES ON THE CONSTITUTION OF THE UNITED
STATES § 1348 (3d ed. 1858), the Framers protected
“the right of the people” to be “consulted upon the
disposal of the money” that the government has
taken from them to pay “[a]ll [its] expences,” 1 St.
George Tucker, BLACKSTONE’S COMMENTARIES App.,
at 362 (1803). The Appropriations Clause thus
restricts “the disbursing authority of the Executive
department,” Cincinnati Soap Co. v. United States,
301 U.S. 308, 321 (1937), “to secure regularity,
punctuality, and fidelity[] in the disbursements of
the public money,” Richmond, 496 U.S. at 427.
Second, “the separation of purse and sword” also
provides Congress, and in turn the people, with “an
indispensable check” on Executive action. Pet.App.
29a. The Framers recognized that giving the powers
of both “the sword and the purse” to a single Branch
“would furnish one body with all the means of
tyranny.” 2 THE DEBATES IN THE SEVERAL STATE
CONVENTIONS ON THE ADOPTION OF THE FEDERAL
CONSTITUTION, at 348-49 (J. Elliot 2d ed. 1891)
(A. Hamilton). To neutralize that threat, they vested
Congress with “the power over the purse,” so that it
would maintain “a controlling influence over the
executive power” by “hold[ing] at its own command
all the resources[] by which a chief magistrate could
make himself formidable.” 1 Story § 531. In short,
Congress could “unnerve the power of the sword by
striking down the arm which wields it.” Id. As
Madison emphasized, Congress’s power to deny “the supplies requisite for the support of government”
would be its “most compleat and effectual weapon”
for defeating “the overgrown prerogatives of the
other branches.” THE FEDERALIST NO. 58, at 394.
The Appropriations Clause thus is “a bulwark of the
Constitution’s separation of powers” that “is
particularly important as a restraint on Executive
Branch officers,” U.S. Dep’t of Navy v. FLRA,
665 F.3d 1339, 1347 (D.C. Cir. 2012) (Kavanaugh,
J.), because “[a]ny exercise of a power” validly held
by the Executive remains “limited by a valid
reservation of congressional control over funds”
needed to carry it out, Richmond, 496 U.S. at 425."
I'm pretty sure Bill Maloni knows more about this than me, but Elizabeth Warren and others in the US Congress wanted to make sure that ofheo (FHFA's much less powerful predecessor) didn't have to go through the US Congress Appropriations Oversight Process where Elizabeth Warren and other lawmakers may have perceived a problem where the 'evil mortgage banksters' lobbyists would be able to speak and possibly influence the peoples ELECTED REPRESENTATIVES IN CONGRESS.
Btw, Ed DeMarco was the former head of ofheo, I believe, and we know what he did to us!
"The 2010 Congress likewise tried to shield the
CFPB from oversight by itself and future Congresses.
According to the CFPB’s architects, it was
“absolutely essential” that the new regulator receive
funding through a mechanism “independent of the
Congressional appropriations process.” S. Rep. No.
111-176, at 163 (2010). They wanted the Bureau to
avoid “the difficulties faced by the Office of Federal
Housing Enterprise Oversight (OFHEO),” which
faced “repeated Congressional pressure because it
was forced to go through the annual appropriations
process.” Id. In their view, OFHEO’s lack of “a
steady stream of independent funding outside the
appropriations process led to repeated interference”
with its activities. 156 Cong. Rec. 13,195 (2010)
(Sen. Dodd); accord id. (even the mere “threat of
congressional interference could very well have
served to circumscribe the actions OFHEO was
willing to take”). The CFPB’s creators “did not want
to repeat that mistake.” Id.
The 2010 Congress thus provided that the CFPB
would not have to “rely on the annual appropriations
process” and would “receive[] funding directly from
the Federal Reserve.” Seila Law, 140 S. Ct. at 2193-
94. The CFPB can simply ask the Federal Reserve each year, in perpetuity, for an “amount determined
by the Director to be reasonably necessary to carry
out the authorities of the Bureau.” 12 U.S.C.
§ 5497(a)(1). The Federal Reserve must grant the
request so long as it does not exceed $597.6 million,
adjusted for inflation. See id. § 5497(a)(2)(A)-(B);
Pet. 3-4. In fiscal year 2022, the Bureau took $641.5
million of the $734 million available. CFPB,
Financial Report of the Consumer Financial
Protection Bureau: Fiscal Year 2022, at 44-45 (Nov.
15, 2022), https://bit.ly/3WCVoke (2022 Report).
Any unused funds “shall remain available” to the
CFPB “until expended” in future years. 12 U.S.C.
§ 5497(c)(1). And the agency may use the Federal
Reserve to “invest[]” the portion “that is not, in the
judgment of the Bureau, required to meet [its]
current needs.” Id. § 5497(b)(3). As of September 30,
2022, the CFPB’s investments were worth nearly
$340 million. 2022 Report, at 86."
22-448 is the case number. https://www.supremecourt.gov/docket/docket.aspx
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED .......................................i
RULE 29.6 STATEMENT ......................................... ii
TABLE OF AUTHORITIES ....................................... v
INTRODUCTION ....................................................... 1
STATEMENT OF THE CASE ................................... 5
A. Legal Background .......................................... 5
B. Procedural History ........................................ 8
REASONS FOR DENYING THE PETITION ......... 11
I. THE DECISION BELOW CORRECTLY VACATED
THE RULE ON APPROPRIATIONS CLAUSE
GROUNDS............................................................. 11
A. The Appropriations Clause Ensures
Congressional Oversight Of The
Federal Fisc And Executive Power ............. 11
B. The CFPB’s Funding Statute Nullifies
Congress’s Appropriations Power In
An Unprecedented Manner ......................... 13
C. The Bureau’s Merits Defenses Of Its
Funding Scheme All Fail............................. 18
D. The Bureau’s Remedial Defenses Of
The Rule Also Fail ....................................... 25
II. IN ALL EVENTS, THE JUDGMENT BELOW
DOES NOT WARRANT REVIEW.............................. 28
A. This Case Is A Bad Vehicle Because
There Are Two Antecedent Grounds
For Vacating The Rule ................................ 29
B. Further Percolation Is Warranted For
The Appropriations Clause Question ......... 32
III. AT MINIMUM, THE CASE SHOULD BE HEARD
NEXT TERM WITH EXPANDED BRIEFING.............. 35
CONCLUSION ......................................................... 36
22-448 is the case number. https://www.supremecourt.gov/docket/docket.aspx
Bringing out the BIG GUNS! Will we finally see the Supremes come out and substantively reign in these out of control federal agencies?
"The Fifth Circuit correctly held that the Rule is
invalid because “Congress’s decision to abdicate its
appropriations power” to the CFPB “violates the
Constitution[]” and deprived the Bureau of lawfully
funded “means to promulgate the rule.” Pet.App. 2a,
44a. The Appropriations Clause is “a bulwark of the
Constitution’s separation of powers” that gives
Congress “exclusive power over the federal purse” as
“a restraint on Executive Branch officers.” U.S.
Dep’t of Navy v. FLRA, 665 F.3d 1339, 1346-47 (D.C.
Cir. 2012) (Kavanaugh, J.). As part of a broad plan,
however, to make the CFPB an independent agency
free from the influence of politically accountable
officials, the 2010 Congress granted the Bureau sui
generis authority to choose its own amount of annual
public funding, in perpetuity and for core executive
powers, subject only to an illusory cap (currently
around $750 million, with unspent funds available
for roll-over and investment). See 12 U.S.C. § 5497;
Pet.App. 33a-36a. In Seila Law LLC v. CFPB, 140 S.
Ct. 2183, 2192 (2020), this Court rejected another
piece of the plan, holding that the 2010 Congress violated Article II’s vesting of executive power in the
President because it shielded the CFPB from
attempts by the President to supervise the agency by
removing its Director. Here, the 2010 Congress
likewise violated Article I’s vesting of fiscal power in
Congress because it shielded the CFPB from
attempts by future Congresses to supervise the
agency by overseeing its funding. Pet.App. 37a."
Clarence, HASHIM M. MOOPPAN of Jones Day is a Counsel of Record for Jones Day in their Opposition to the CFPB Petition for a Writ of Certerrori. Recall, Hashim represented the FHFA in Collins during orals.
Be neat if he was able to argue the CFPB case for the Plaintiff, but they have NOEL J. FRANCISCO, listed as lead Counsel.
Here's the brief: http://www.supremecourt.gov/DocketPDF/22/22-448/252221/20230113130438937_22-448%20bio.pdf
This is kinda interesting:
Although the Court should deny the Bureau’s
petition, if it grants that petition, it should either
grant the Lenders’ cross-petition or add to the
Board’s petition two antecedent questions that also
are presented by the judgment under review:
2. 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.
3. Whether the Rule should be vacated because
the prohibited conduct falls outside the statutory
definition of unfair or abusive conduct.
I think we win in the end, but what if Bernie wins in 2024?
How about this one: MATERIAL RISK DISCLOSURE #47. YOUR PARTNER, THE FEDERAL GOVERNMENT MAY MAKE "AN OFFER THAT THE BOARD CAN'T REFUSE" TO ENTER A CONSERVATORSHIP AND REMEMBER WE ALREADY PICK 5 BOARD MEMBERS.
#48. SOMETIMES THE FHFA IN CONJUNCTION WITH ANOTHER FEDERAL AGENCY MAY ACT IN SUCH A DETRIMENTAL WAY TO SHAREHOLDERS INTERESTS AS A BANANA REPUBLIC.
#49. THE PHRASE "TEMPORARY" AND "IN PERPETUITY" HAVE THE SAME MEANING WHEN MANAGING A FUTURE CONSERVATORSHIP UNDER HERA.
#50. THE FHFA MAY DECIDE THAT IT LIKES TO CONTROL 100% OF YOUR CORPORATIONS AND THEIR PROFITS INTO PERPETUITY AND THERE'S NOTHING YOU CAN DO ABOUT IT!
#51. THE FHFA CAN RAID THE CASH OF YOUR BALANCE SHEETS FOR UNLIMITED FUNDING AND INTO PERPETUITY UNDER HERA, THERE'S NOTHING YOU CAN DO ABOUT IT.
I mean who WOULDN'T want to get in on this !
HeeeeHeeee! An IPO seems like a hard sell to me but I understand how the few remaining Shareholders (including me) want this bizarre drama to end ASAP.
How it does it end?
The government has been a Shareholders worst nightmare here and may have a duty to disclose to prospective investors JUST HOW BAD THIS PARTNERSHIP CAN BE.
Shame on Uncle Suggy for taking all our profits into perpetuity in return for NOTHING!
The unfortunate fact of the matter IS that the federal government has been the worst partner I can imagine in this public mission/private capital in a 1st Loss Position.
As you may be aware, Sallie Mae's board of Directors was happy to exit their partnership with the federal government especially after the federal government decided to Nationalize the student loan lending market.
So in the new IPO, under MATERIAL RISKS DISCLOSURE: UNDER HERA THE FHFA CAN GIVE AWAY ALL FUTURE PROFITS INTO PERPETUITY LIKE WE DID ON AUGUST 17, 2012
or this one:
UNDER HERA YOUR PRIVATE CAPITAL IN A 1ST LOSS POSITION MAY BE TAKEN IF FHFA DECIDES IT'S IN THE FHFA'S BEST INTERESTS OR THE PUBLIC IT SERVES
At least he's on record and testified under oath. I think DeMarco may have convinced a juror or two, but why did he do all that work and analysis on mortgage forgiveness but apparently couldn't take the time to evaluate his options, given the senior staff he had, before and during discussions with Treasury on the 3rd Amendment?
It's hard to cross examine him effectively when the government has presented HUGE HOLES in the normal Discovery Process where information is normally readily available to contradict witnesses.
Here, DeMarco, FHFA, and the GSES with Uncle Suggy's boot on their neck are protected from us discovering WTF went on behind the closed doors at Treasury, the White House, and the FHFA.
"I'm the most TRANSPARENT POTUS EVER"-Barry
After DeMarco testified, I speculated that maybe the administration at the time wanted mortgage forgiveness but both Watt and DeMarco said "No". Was the NWS payback, political opportunism, a sure fire way to get funding by bypassing the Congressional Appropriations Process controlled by an opposition party determined to starve funding for Obamacare?
Whatever it was, it deprived the GSES of a much needed capital rebuild.
We may never know for sure as the feds hide behind Executive Privilege and National Security exemptions.
Haven't read the D.C. Circuit decision nor the other federal circuit decisions that decided it was okay to bypass the Congressional Appropriations Oversight Process.
This is from the 5th Circuit Appealate Panel Decision that references those cases: pg. 34-36:
"The Bureau also contends that because every court to consider its
funding structure has deemed it constitutionally sound, we should too.15 But
carefully considering those decisions, we must respectfully disagree with
their conclusion. Those courts found the constitutional scale tipped in the
Bureau’s favor based largely on one factor: a handful of other agencies are
also self-funded. For instance, the D.C. Circuit emphasized that “Congress
has consistently exempted financial regulators from appropriations: The
Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the National Credit Union Administration,
and the Federal Housing Finance Agency all have complete, uncapped
budgetary autonomy.” PHH Corp., 881 F.3d at 95.
Such a comparison, focused only on whether other agencies possess a
degree of budgetary autonomy, mixes apples with oranges. Or, more
accurately, with a grapefruit. Even among self-funded agencies, the Bureau
is unique. The Bureau’s perpetual self-directed, double-insulated funding
structure goes a significant step further than that enjoyed by the other
agencies on offer. And none of the agencies cited above “wields enforcement
or regulatory authority remotely comparable to the authority the [Bureau]
may exercise throughout the economy.” All Am. Check Cashing, 33 F.4th at
237 (Jones, J., concurring); see also William Simpson, Above Reproach: How
the Consumer Financial Protection Bureau Escapes Constitutional Checks &
Balances, 36 Rev. Banking & Fin. L. 343, 367–69 (2016).16 Taken
together, the Bureau’s express insulation from congressional budgetary
review, single Director answerable to the President, and plenary regulatory
authority combine to render the Bureau “an innovation with no foothold in history or tradition.” Seila Law, 140 S. Ct. at 2202. It is thus no surprise that
the Bureau “brought to the forefront the subject of agency self-funding, a
topic previously relegated to passing scholarly references rather than front-
page news.” Charles Kruly, Self-Funding and Agency Independence, 81 Geo.
Wash. L. Rev. 1733, 1735 (2013).
We cannot sum up better than Judge Jones did:
[T]he [Bureau]’s argument for upholding its funding
mechanism admits no limiting principle. Indeed, if the
[Bureau]’s funding mechanism is constitutional, then what
would stop Congress from similarly divorcing other agencies
from the hurly burly of the appropriations process? . . . [T]he
general threat to the Constitution’s separation of powers and
the particular threat to Congress’s supremacy over fiscal
matters are obvious. Congress may no more lawfully chip away
at its own obligation to regularly appropriate money than it may
abdicate that obligation entirely. If the [Bureau]’s funding
mechanism survives this litigation, the camel’s nose is in the
tent. When conditions are right, the rest will follow.
All Am. Check Cashing, 33 F.4th at 241 (Jones, J., concurring). The Bureau’s
funding apparatus cannot be reconciled with the Appropriations Clause and
the clause’s underpinning, the constitutional separation of powers."
Footnote 15 See, e.g., PHH Corp., 881 F.3d at 95–96; CFPB v. Citizens Bank, N.A., 504 F.
Supp. 3d 39, 57 (D.R.I. 2020); CFPB v. Fair Collections & Outsourcing, Inc., No. 8:19-cv-
2817, 2020 WL 7043847, at *7-9 (D. Md. Nov. 30, 2020); CFPB v. Think Finance LLC, No.
17-cv-127, 2018 WL 3707911, at *1-2 (D. Mont. Aug. 3, 2018); CFPB v. Navient Corp., No.
3:17-cv-101, 2017 WL 3380530, at *16 (M.D. Pa. Aug. 4, 2017); CFPB v. ITT Educ. Services,
Inc., 219 F. Supp. 3d 878, 896-97 (S.D. Ind. 2015); CFPBv. Morgan Drexen, Inc., 60 F. Supp.
3d 1082, 1089 (C.D. Cal. 2014).
Footnote 16: Neither is the Bureau’s structure comparable to mandatory spending programs
such as Social Security. The Bureau self-directs how much money to draw from the
Federal Reserve; the Social Security Administration (SSA) exercises no similar discretion.
Compare 12 U.S.C. § 5497(a)(1) (creating Bureau funding mechanism) with 42 U.S.C. § 415
(setting parameters for Social Security benefit levels). Quite to the contrary, SSA pays
amounts Congress has determined to beneficiaries whom Congress has identified. See 42
U.S.C. § 415 (identifying amounts); 42 U.S.C. § 402 (identifying eligible individuals). The
Executive Branch’s power over “automatic” Social Security spending is therefore purely
ministerial. Furthermore, Congress retains control over the SSA via the agency’s annual
appropriations. See, e.g., Social Security Administration, Justification
of Estimates for Appropriations Committees | Fiscal Year 2023
(2022), https://www.ssa.gov/budget/FY23Files/FY23-JEAC.pdf. Other benefits
payments, including Medicare and Medicaid, the Supplemental Nutrition Assistance
Program, and Temporary Assistance for Needy Families, are administered similarly by
agencies subject to annual appropriations set by Congress.