Fannie Mae-No Politics (FNMA)

[obiterdictum]

The fundamental decisions made by majorities of US Court of Appeals Fifth Circuit En Banc in the Collins et al. vs FHFA and Treasury case are as follows:

• A majority of the en banc panel agreed with the Plaintiffs that the FHFA exceeded its statutory authority as conservator in executing the net worth sweep (pp. 27-42). The net worth sweep was found to be excessively punitive and outside the authority of the FHFA. This en banc majority reversed the motion to dismiss this count (Count 1) and remanded this count back to the District Court where a District Court trial based on facts may be conducted or a summary judgment may be granted. An en banc court majority states that "...Shareholders could theoretically obtain full relief under Count I alone,..."

• Counts II and III (see below) were affirmed and not reversed.

• A majority of the en banc found that the FHFA was unconstitutionally structured and violates the separation of powers, and therefore, reversed the Count IV judgment and remanded that claim for entry of judgment wherein the “for cause” removal protection found in 12 U.S.C. § 4512(b)(2) for the FHFA Director is unconstitutional.

• The network sweep was not legally invalidated by the US Court of Appeals Fifth Circuit en banc.

• No monetary relief was granted by the Fifth Circuit en banc decisions.

Source
IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT - No. 17-20364
PATRICK J. COLLINS; MARCUS J. LIOTTA; WILLIAM M. HITCHCOCK, Plaintiffs–Appellants, v. STEVEN T. MNUCHIN, SECRETARY, U.S. DEPARTMENT OF TREASURY; DEPARTMENT OF THE TREASURY; FEDERAL HOUSING FINANCE AGENCY; MARK A. CALABRIA, DIRECTOR OF THE FEDERAL HOUSING FINANCE AGENCY, Defendants–Appellees.
http://www.ca5.uscourts.gov/opinions/pub/17/17-20364-CV2.pdf

PLAINTIFFS' ALLEGATIONS
• In Count I, they allege the Administrative Procedure Act (APA), 5 U.S.C. § 706(2)(C), (D), affords relief because FHFA exceeded its statutory conservator authority under 12 U.S.C. § 4617(b)(2)(D).

• In Count II, they allege the APA, 5 U.S.C. § 706(2)(C), (D), affords relief because Treasury exceeded its securities-purchase authority under 12 U.S.C. §§ 1455(l), 1719(g). Specifically, they allege that Treasury purchased securities after the sunset period, failed to make the required “[e]mergency determination[s],” and disregarded statutory “[c]onsiderations.”

• In Count III, they allege the APA, 5 U.S.C. § 706(2)(A), affords relief because Treasury’s adoption of the net worth sweep was arbitrary and capricious.

• In Count IV, they allege FHFA violates Article II, §§ 1 and 3 of the Constitution because, among other things, it is headed by a single Director removable only for cause.